Estate planning is essential for having a say in what happens to your assets after you die. If you are the parent of a child with a disability, you might have unique considerations that a special needs trust could help you address.
Understanding what a special needs trust is and how it can protect your loved one could make it easier to plan for your estate.
What is a special needs trust?
A special needs trust is a legal arrangement in which you place assets into a trust for your disabled child. A trustee manages the trust and has the authority to use funds to improve your loved one’s quality of life.
Since a special needs trust provides support in addition to your child’s benefits without compromising them, there are restrictions on how a trustee can utilize the funds. They cannot use money from the trust to pay for expenses already covered by your child’s government benefits.
How can a special needs trust protect my child’s benefits?
Many government benefits carry income or asset limitations. If your loved one relies on assistance, an inheritance could threaten their ability to continue receiving support.
Assets put into a special needs trust do not count when determining your child’s eligibility for benefits programs such as Medicaid, Supplemental Security Income (SSI), and free medical insurance. This allows you to provide for your child without putting their necessary benefits at risk.
If you have a child with a disability, your estate plan can protect their financial security. Setting up a special needs trust can help safeguard your child’s future and ensure they are well cared for when you are gone.