All parents worry about making sure their children are provided for both now and far into the future. Parents work hard to save for extracurricular expenses, daycare costs, and college tuition. Parents of special needs children have even more additional costs to concern them, such as occupational therapy or tuition for a private school to fit the needs of their child. Moreover, parents of special needs children also know that their children may need assistance financially after the child has turned eighteen and after the parent has passed. One way to help plan for the future of your special needs child is to set up a special needs trust.
A special needs trust is generally created to provide for the needs of those who lack the mental capacity to care for themselves and handle their own finances. One huge advantage of creating a special needs trust is that you can provide financial stability for your child without interfering with their ability to remain eligible for certain government benefits. If you simply gifted a large amount to your child for later use or left a lump sum of assets to him or her in your will, it would be counted as an asset and would make the child ineligible for benefits like SSI or Medicaid.
With a special needs trust, a third party is named as the trustee and your special needs child is named as the beneficiary. The assets in the trust can be cash, real estate, or any other asset you wish to provide for your child. The trustee will then provide money for your special needs child in the way you instruct in the trust documents. The assets in the trust are also shielded from creditors. This trust can make sure that the child’s living expenses are properly paid and provided for by, for example, instructing the trustee to pay the expenses directly to the living facility instead of providing cash to the disabled adult child. The trustee could also be instructed to provide additional funds directly to the child for incidental living expenses. No two trusts are alike, and your estate planning attorney can help you construct a special needs trust that is tailored to meet the needs of your special needs child.
Call us today at 651-464-7292 to talk with us about your special needs child. We can help you construct a solution for his or her long-term financial care.