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Planning with GoFundMe Accounts
Crowdfunding donation sites have become very popular in the last few years. These sites allow individuals to set up pages and ask third parties to make donations to a particular account for a particular purpose. One such Crowdfunding website is called GoFundMe.
These pages have raised tens of thousand of dollars for various causes over the last few years. My suggestion is that before individuals set up a GoFundMe account for someone who may either be on a governmental program or could be on a governmental program in the future, it is very important that the account be set up in such a way as to not disqualify that individual from those governmental benefits.
With a GoFundMe account, an individual called an organizer has control over the funds in the account. The organizer will be asked to send an invitation to a person for which the GoFundMe account is established. The organizer is also tasked with determining the purpose of setting up the account and explaining the process of the GoFundMe account.
In order to make sure that the individual who may benefit from the account is not ruled ineligible for a governmental program because of receiving assets in a GoFundMe account, it is my suggestion that the individual organizer set up a third-party special needs trust for that individual beneficiary. This is a trust that the organizer sets up and names either themselves or another individual as the trustee of the trust. The individual who the GoFundMe account was set up for will be the beneficiary of the trust. The terms of the special needs trust will provide for very specific reasons that the trustee can distribute funds to the beneficiary to use the funds. Specifically, the funds will not be allowed to be used for food, clothing, or shelter, or any basic needs. However, this trust is also sometimes referred to as a wholly discretionary trust because it is totally up to the trustee’s discretion to determine whether the beneficiary receives any funds and what those funds will be used for.
As a result of this type of planning the individual in the GoFundMe account will be able to be the beneficiary of this special needs trust to receive funds for extra supplemental needs. However, the beneficiary should also be able to obtain various governmental benefits to help them with their basic needs.
Therefore, before any individual sets up a GoFundMe account or other type of crowdfunding account it is very wise to contact an estate planning attorney to make sure that the plan is set in place to develop a special needs trust in certain types of situations.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.
James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.
405 Chauncey Avenue NW
New Philadelphia, Ohio 44663
Phone: (330) 364-3472
Fax: (330) 602-3187
Email: jcontini@www.kwgd.com