Planning for a Special Needs Child

Parents and guardians of children with disabilities face challenges that others cannot imagine. Caring for such a child requires a huge physical, emotional and financial commitment. The parents of these children struggle with the questions of who will provide for them, and what resources and guidance will be available for them, when the parents are gone. All parents should provide for their children, but for parents of a special needs child, planning ahead is critical because the child may never achieve independence.

Without proper planning, the child may inherit assets which disqualify him/her from receiving crucial government benefits. The government also may seek reimbursement out of that inheritance for benefits the child already received.

A Special Needs Trust (also know as a Supplemental Needs Trust) can be used to earmark assets for the benefit of a child, while maintaining eligibility for government benefits. These trusts can be set up now, with the parents acting as trustees, in order to manage assets on their child’s behalf.

Normally there is no limit on the value of assts that can be put into the trust for the benefit of a special needs child. However, the trust must contain very specific language that protects the child’s ability to receive SSI, Medicaid and other government benefits. With proper planning, the trust may be designed to accept any inheritance that, under other circumstances, would go directly to the special needs child, thereby preserving the child’s right to obtain these critical benefits.

Additionally, parents can name successor trustees to handle the finances of the trust after their deaths or disabilities. These provisions ensure that the child will continue to receive needed assistance throughout his/he lifetime. In addition to provisions that safeguard government benefits, a Special Needs Trust is an excellent tool to provide detailed instructions for the care of a child or adult with disabilities.

For more information on a Special (Supplemental) Needs Trust, contact us today.