As a parent of a disabled child, your estate planning needs involve special considerations, and these considerations often involve making arrangements for who is to care for your child once you are no longer able to do so yourself. As a special needs parent, you also must figure out how to support your child in the long-term financially, and one way to do so involves establishing a special needs trust.
A special needs trust, or supplemental needs trust, is something you can create if you wish to leave your child assets that will not hinder his or her ability to maintain government benefits through Medicaid, Supplemental Security Income and so on. You can fund the trust using insurance policies and other assets that are not the direct property of the child for which you create the trust.
Benefits of the special needs trust
Arguably, the biggest benefit of a special needs trust is that it gives you a way to provide for your child after your passing without affecting your child’s ability to retain his or her public assistance. How? Generally, your child’s public assistance and benefit eligibility hinge on how much money he or she has, meaning that if he or she has too much at his or her disposal, your child will become ineligible for public assistance.
Therefore, leaving money in a standard will can put your child over the threshold for public benefits, meaning he or she can lose access to desperately needed funds. Assets you leave your child in a special needs trust, however, do not factor in when making determinations about benefit eligibility, meaning this is a safe way to leave your child assets without unintentionally hurting him or her by doing so. By leaving assets to your disabled child in a special needs trust, you also have the option of using these funds for other purposes once your child passes on. This means money left in it can go toward other family members or it can go toward charitable causes if you would like.
Estate planning is important for everyone, but as the parent of a special needs child, it is even more essential that you make plans to provide for your child after your passing.
