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View Full Version : OT~ We need to set up a trust for a minor child


daughtersrus
04-17-2006, 04:50 PM
Our daughter will be getting a settlement soon for an injury that she suffered. We need to set up a trust for that money to be put into. To make matters more complicated, this child is disabled and will never be able to support herself.

The PI lawyer that we have, hasn't been as helpful as I'd like answering our questions. Can anyone point me to a good website that will explain the different types of trusts that there are? From what I've been told by the lawyer, the money will need to go into an insured bank account. We've decided for right now, to open a 13 month CD (the rate is 5.25%). We will need court approval to take money out or reinvest the money.

We also want to protect the money as best that we can so that it's not all eaten up by taxes and the government when she is no longer covered under DH's health insurance. It's won't be a huge sum (around $17,000-$20,000) and it's quite sad that the lawyer is actually getting more than she is since he takes his cut before the health insurance is reimbursed for the medical expenses and the fees are paid.

Has anyone here been through this or maybe possibly offer some advice?

We're in IL if that matters

Thanks!

lovemygoofy
04-17-2006, 05:16 PM
Speaking as someone who inherited a trust as a child from my grandfather, everytime you want to move the money and have to petition the court be prepared to pay court fees or attorney fees or anything associated with legal fees.

I would talk to a certified financial planner to help you best maximize the monies. Think about how you plan to set this trust up and at what age you want your daughter to come into the money. Do you want her to be able to access all the money or just a portion a year? Is someone going to be in charge of the trust should something happen to you and your husband? Just little things to think about. Good luck with the planning.

DVC Sadie
04-17-2006, 05:29 PM
Speaking as someone who inherited a trust as a child from my grandfather, everytime you want to move the money and have to petition the court be prepared to pay court fees or attorney fees or anything associated with legal fees.

I would talk to a certified financial planner to help you best maximize the monies. Think about how you plan to set this trust up and at what age you want your daughter to come into the money. Do you want her to be able to access all the money or just a portion a year? Is someone going to be in charge of the trust should something happen to you and your husband? Just little things to think about. Good luck with the planning.


ITA! This is the most sound advice I have ever read here on these boards. Please seek a Certified Financial Planner! I am not talking about financial planners that are through banks or different brockerage houses. In order to best protect the person who the trust was written for you need an unbiased point of view. Having set up multiple trusts for both family members and different charities please listen to a CFP for the best protection of the child!

oneangel
04-17-2006, 09:26 PM
I Pmd you daughters, I sent some information on what I have. I also live in Illinois, and with your child being disabled, look into the special needs trust. It has been a lifesaver for us!!! Let me know if you need any info, we have had ours for our 7 year old for the last two years and he is also disabled. Hope I can help you.

dzorn
04-17-2006, 10:13 PM
No, NO NO don't put the money into a trust now. You need to look into a specila needs trust. You don't want to put the money in the trust now. It will be taxed at the highest tax bracket. You should not have to deal with probate while you are still living. WE live in Michigan and almost went this route. You need to work with a fancial planner that specializes in special needs situations.
FYI Most insurance companies will cover disabled depends (no matter the age) just as they cover younger children as long as you register them when they are 18.

Look to your local support groups they may be able to lead you to someone in your area.

It's late and I'm tired so I'm sure I'm missing things. I'll try and look tomorrow for more of my information.

Denise

oneangel
04-18-2006, 09:08 AM
Dzorn, lliving in Illinois, it is a law it has to go straight into a trust, that is for the benefit of the child. That money is to be used only for the child. And yes a special needs trust is the route you need to go. I just moved our sons special needs trust to morgan keegan trust in illinois, that is with regions bank. I have a wonderful trusteee that works with us. I wouldnt recomend going to a financial planner for the resaon they charge way way too much to take care of this. Your first bet would be to find a lawyer that does deal with special needs trust like we did. I wish I knew what area daughtersrus is from, I could direct her to the lawyer we found and to regions bank with our trustee. I worked with a local bank for the last two years with our special needs trust and that didnt go too well, now we are in good hands. I knopw some people dont like the idea of a bank, but let me tell you, two years of searching and dealing with financial planners and banks, the bank was the right route. It is also a law that the trust has to have a trustee, now depending on what kind of trust, it depends on who can be the trustee. I know my son gets ssi so we have the special needs trust, and we have a trustee that is the person we go to when we need something. Which i think is great. OUr money grew a whole lot of the loast year, and my son was very well taken care of. Like you said, i am sure I missed alot, but after almost three years of dealing with the trust of my disabled son in Illinois, I feel I know alot byu now, lol. Hope any of this helps.

RADOPT
04-18-2006, 02:33 PM
We also want to protect the money as best that we can so that it's not all eaten up by taxes and the government when she is no longer covered under DH's health insurance. It's won't be a huge sum (around $17,000-$20,000) and it's quite sad that the lawyer is actually getting more than she is since he takes his cut before the health insurance is reimbursed for the medical expenses and the fees are paid.

Where you live matters a lot. I have two special needs children. You not only want to protect the money but it is very important that you protect her future benefits due to her disablities. BE SURE to find someone who specializes in special need - it is very important! You should ask around at school, any special needs groups, etc. I don't know if it would have anything for ILL, but check out Parents Helping Parents (http://www.php.com/) - they may have a link or resource.

daughtersrus
04-19-2006, 08:34 AM
Thank you to all of you that have responded to my post. Iím sorry that I didnít respond sooner but we spent the day yesterday with doctors at Shriners and then at her special needs dentist (Yeah! No cavities!) :Pinkbounc :cheer2:

We are in the western suburbs of Chicago and our PI lawyer is in Chicago. We're on the border of Will and DuPage Counties so if anyone can recommend someone in that area, it would be great.

I can say that I'm less than thrilled with our PI lawyer but as many of you know, it's hard to find one that will take a case for a disabled child's injury. He seems to want to get this done "now" so that he can get his cut. He gave me the name of a lawyer in a northern suburb but he said that it wouldn't be practical to pay that lawyer's fees because it would eat any at much of what our daughter will get.

For those that have been through this, can you give me an idea as to how much the fees to set the trust up will be?

The settlement is only $40,000 because the great state of IL has a law protecting school districts from being sued but that's another long story that I won't bore you with but would be happy to share by PM if anyone is interested. After the lawyer takes his cut, we repay him for the expenses that he's put out and repay our health insurance (thank God that we don't have to pay BC/BS or the hospital back for the PPO discounts), she will get about $17,000.

It's not much but when the injury happened, we just wanted them to pay the bills and they refused. We almost ended up in collections because the health insurance wouldn't pay because most policies don't cover injuries (you have to get the insurance of the person that caused the injury to pay) and we didn't have $30,000 + just laying around. We finally got our health insurance to pay with the stipulation that we would try to recover the money.

Now, not only is the school district having to pay this settlement, they are paying over $40,000 a year in tuition to send our DD out of district to a school that specializes in disabled children. They didn't fight us on that one since it was quite obvious that they couldn't provide a safe environment for her here in district.

Anyway, sorry to ramble but I would really appreciate any referrals.

Thanks Again!

oneangel
04-19-2006, 10:38 AM
We paid around 3500 initially to set up the special needs trust fund. Then we were charged for the phone calls we made to that lawyer, so around 4000 all together. Now my son won over a million dollars, so i dont know if it has something to do with how much money you are putting in it or not, i dont see where that would matter. Just make sure you get a very good lawyer that knows what he is doing to set it up for you so it will work the way it is supposed to. Then we have to pay quarterly for the trsut to be taken care of by a trustee which is about 600 a quarter i believe. If you have any questions please PM me and I can answer a whole lot abou these special needs trusts . Hope all works out good for you!!!