Contact Walk-In Wills today for help with will and trust creation, probate, long-term care planning, and other essential estate planning needs.

Qualified Disability Trust

Caring for a disabled child or family member typically entails trust creation, which ensures the person has access to essential funds throughout their life. However, trusts often come with quite a few complications, especially when it comes to tax matters.

Since 2003, Walk-In Wills has provided dependable and affordable estate planning services. Along with wills, we also provide guidance when it comes to the creation of trusts to ensure our clients can take full advantage of these beneficial tools.

What Is a Qualified Disability Trust and How Does It Work?

A type of special needs trust, the defining feature of a QDisT is that it’s tax exempt on the federal level. Keep in mind that contributions to trusts can create yearly income, which is then taxed. Depending on the amount of the contribution, the taxes generated could be quite exorbitant, thereby putting undue burden on the disabled individual’s parents or guardians.

By making QDisTs tax exempt, families face a reduced tax burden and less stress overall. Any income earned by the trust can be included in IRS Form 1041 and will be tax exempt provided that certain criteria apply.

What Kind of Requirements Apply to Qualified Disability Trusts?

There are certain criteria a special needs trust must match to be considered a QDisT, including:

  • The beneficiary of the trust must be under age 65 when the trust is created
  • The QDisT must be an irrevocable trust, meaning it cannot be changed
  • The disabled person must meet requirements established by the Social Security Act regarding the disability
  • The QDisT must only help the disabled person and not be used for any other purpose

In 2023, tax payers with QDisTs are permitted to claim up to $4,700. This figure often changes from year to year. For instance, the maximum amount was $4,400 in 2022.

Why Should You Choose Walk-In Wills?

Now proudly serving individuals throughout Chandler, AZ, our estate planning team can perform a thorough review of your unique situation to provide the best possible guidance. From there, we’ll walk you through the estate planning process step by step, all within a soothing and relaxed environment.

Schedule a free consultation at our office today by calling (480) 470-7000. You can also contact us to learn more about our firm and what we can do for you.