When you have a child with special needs, ensuring their future care and financial security is a top priority. One way to achieve this is by setting up a special needs trust (SNT), which allows you to provide for your child without jeopardizing their eligibility for government benefits, such as Medicaid and Supplemental Security Income (SSI).
A special needs trust is a legal document that holds assets for a beneficiary with special needs. The purpose of this trust is to supplement, not replace, the benefits your child receives from government programs. With an SNT in place, you can ensure that your child has access to additional resources to improve their quality of life, while preserving their eligibility for vital services, as Special Needs Alliance reports.
Setting up a special needs trust involves three key parties:
You may also name a remainder beneficiary, who will receive any leftover assets if your child passes away.
You might wonder if leaving money directly to your child or a trusted family member is enough. Unfortunately, doing so could disqualify your child from receiving essential benefits. A special needs trust helps you avoid this risk by allowing you to direct your estate to your child without affecting their eligibility for government programs.
The trust can cover a variety of expenses that improve your child's quality of life, such as:
There are three main types of special needs trusts:
A trust needs adequate funding to serve its intended purpose. Most parents fund the SNT upon death through life insurance, retirement accounts, or savings. However, you can contribute to the trust during your lifetime if you have sufficient resources. Knowing that the trust is funded and ready to support your child's future needs, this strategy can offer peace of mind.
The trustee plays a crucial role in managing the special needs trust. Their responsibilities include:
Some families choose a trusted family member, while others opt for a professional or corporate trustee. Either path can be successful. However, you must carefully weigh your options. The right trustee must understand the requirements of a special needs trust and prioritize the child's long-term well-being.
Creating a special needs trust involves complex decisions that require careful consideration. A special needs planning attorney can guide you through setting up the trust, planning to fund it adequately, and helping you select a trustee. They will also ensure that the trust complies with current legal standards, critical for preserving your child's government benefits.
Planning for the future of a child with special needs requires careful attention to detail. Our trust attorneys at the Werner Law Firm can help you establish a special needs trust that protects your child’s eligibility for government benefits while providing them with additional resources to enhance their quality of life.
If you have any questions, schedule a free appointment with us through our online appointment page.
You can also read reviews from some of the hundreds of clients we have helped over the years.
Reference: Special Needs Alliance "A Special Needs Trust and Your Plan for the Future"
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