Each year, roughly 6,000 babies in the United States are born with Down syndrome. It is the most common chromosomal disorder today. Yet, if you are the parent of a child with Down syndrome, you know that each one of these babies is a unique individual with different gifts and challenges. As they grow, you want them to have every advantage.
However, you know you won’t always be there to care for them. How can you ensure a better, more financially secure future for a child with special needs?
There is a specific kind of trust for just such a scenario.
What is a special needs trust?
A special needs trust is a way to provide future funds to your dependent child without disqualifying them for government assistance programs like Social Security, Supplemental Security Income, Medicare or Medicaid. The trustee or trustees—typically a family member, friend and/or trusted professional—oversee the assets in the trust. An additional benefit of a trust is that creditors cannot seize the funds to repay debts.
Why should you consider one?
Children with Down syndrome face intellectual and developmental challenges. Dealing with money may or may not be something that they feel confident in or capable of. By setting up a trust, you can not only have peace knowing that your child will be provided for but also relax in the certainty that you can determine the use to which that money is put. Through various documents, you can allocate the funds for a specific purpose in legally binding terms.
When should you create the trust?
You must establish a special needs trust before the beneficiary—your child—turns 65. As they will likely need the funds well before then, it is a good idea to determine the right time for the trust based on your aging process rather than your child’s. It is essential to take care of this matter as part of your estate plan.