While not everyone who works on an estate plan will need a trust, or a specific fiduciary arrangement that allows a third-party trustee to hold on to assets on behalf of someone else, as a parent of the disabled, you very well might. Providing a lifetime of care for your child, whether he or she has autism, Down syndrome or another type of disability, can prove extremely expensive.
A special needs trust is one way to help safeguard your disabled child’s future while doing your part to ensure your child has everything he or she needs after your passing.
What goes into a special needs trust
A special needs trust, which is sometimes called a supplemental needs trust, contains assets from a disabled person’s loved ones that can ultimately be used to provide support and care for the special needs child. Property and life insurance policies are some examples of the types of assets that might be included in a special needs trust, but other assets are often fair game, too, if they do not directly belong to the disabled child. Because the assets in the trust are not the direct belongings of the disabled child, they can, if the disabled child dies, be passed on to other family members or purposes, such as charitable causes.
Benefits of a special needs trust
Chances are, your special needs child is already receiving some type of public assistance, whether in the form of Medicaid, Supplemental Security Income or what have you. The problem is, there are certain financial guidelines your child must meet to continue to receive such benefits, and if you leave your child considerable assets in a will, this can impede his or her ability to receive government assistance.
Why? The public assistance your child is receiving is likely income-based, and having too much money can make your child ineligible for benefits he or she may greatly need. A special needs trust offers something of a loophole, however, in that you can leave your child assets in the trust without worrying about them affecting his or her ability to retain benefits.
Planning for the future is important for everyone, but as a special needs parent, it becomes even more critical that you have your ducks in a row regarding end-of-life plans.
