Can We Combine Two Special Needs Trusts for My Sister?

 In Revocable Trusts, Special Needs Planning

Question:

Upon mom’s death, her will created a special needs trust for my sister. Now, our dad has passed and his trust created a special needs trust for the same sister. Do we have to have two different trusts for my sister? Can we put my sister’s inheritance in the first special needs trust? If we need two to begin with, can we consolidate them?

Photo by Joanna Kosinska on Unsplash

Response:

If the trusts are identical, you can combine them, either at the outset or after both have been funded. If they are different, this will merit a bit more analysis. The biggest roadblock would be if the trusts name different remainder beneficiaries to receive any funds remaining upon your sister’s death. In that case, the beneficiaries of the trust that was closed out would have reason to complain. You would need them to sign off on any action that depleted one trust in favor of the other. Otherwise, as long as both trusts have the same purpose, I can’t see any reason why they cannot be combined.

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