Parents work hard to take care of their children. Few work harder than those with children who have special needs. These children grow into adults who will likely need more care and support from their parents compared to their peers. It is common for parents to worry about the care of their special needs child, to worry about who will take care of their child when they cannot.
Some estate planning tools can help ease this worry. One example: a special needs trust.
What is a special needs trust?
A special needs trust is a legal tool that can take care of assets for the benefit of an individual with special needs.
Why would someone with special needs require this type of trust?
As a society, we have agreed that there is certain aid that we will provide to help those with special needs in the form of government benefits. An inheritance set up as an outright gift can impact the individual’s ability to continue to receive government benefits like Medicaid and Supplemental Security Income (SSI). Instead, when drafted wisely, a special needs trust can better ensure the individual receives these benefits while providing additional financial stability to supplement these funds.
Additional benefits can include:
- Control. Parents who set up a special needs trust can name the trustee who manages the funds within the trust while also providing criteria on how the trustee should use these funds. Common examples include expenses related to additional medical care, education, entertainment, and travel.
- Increased contributions. Your child likely has other family members and loved ones who would like to contribute to their well-being. Having a special needs trust can provide them a means to support the child in a beneficial and meaningful way.
- Financial independence. Establishing this trust can help your child have the financial freedom to enjoy life, like taking a vacation.
It is also important to note that this legal tool provides a layer of protection to the assets set aside for the special needs child.
Is there anything else I should know about setting up this type of trust?
A trust is a legal tool guided by the language used to create it. A failure to include certain provisions or to meet legal requirements can mean the trust will not meet your goals. You can better ensure the trust meets your needs by seeking the aid of a legal professional with experience drafting these types of trusts.