Many parents with school-age children look forward to the day their child leaves home and takes responsibility for themselves. However, if your child has a disability, things can be different. There may never be a day when your child can look after themselves. They may always need help. Thus, you need to make provisions for their future, looking ahead to a time when you can no longer take care of them yourself.
Many children with special needs will eventually need to file for Supplemental Security Income (SSI) and Medicaid benefits. While those provide both income and medical benefits, they are needs-based systems. As such, your child will be limited in what resources they are allowed to have. Should you leave them a large amount of money through your estate the normal way, they will lose their entitlement to these important resources.
One option you have to work around the restrictions is to create a special needs trust. It has various advantages:
- It won’t cause your child’s benefits to cease: By putting money in the appropriate kind of trust and making your child the beneficiary, the government agencies cannot reduce their benefits because the money is technically owned by the trust, not the person.
- It protects money you leave them: Just because your child lives with a disability does not mean they cannot manage their finances. However, some mental disabilities would preclude your child from doing so. In this case, a trust is a safe pair of hands to look after their money for them. Without it, someone could take advantage of your child, leaving them with financial difficulties.
If you have a child with a disability, seek some assistance to better understand more about the various types of special needs trusts available. An experienced advocate can help you figure out a plan that meets your goals.