The Major Question for Parents of Special Needs Children
Is your current estate plan structured in a way that protects your child's financial future and government benefit eligibility?
How Does the Special Needs Trust Help?
Take action now to secure your family's future.
What is a Special Needs Trust and how can it help my family plan for the future of my special needs child?
Main features of a Special Needs Trust (SNT):
Assets in the trust are managed by a trustee, who is responsible for making distributions on behalf of the beneficiary (the person with special needs).
Trust assets are not considered the beneficiary's personal assets for the purpose of qualifying for government assistance programs.
The trust can be funded with various assets, including cash, real estate, investments, and life insurance policies.
Benefits of a Special Needs Trust:
Protects eligibility for government benefits: By placing assets in an SNT, the beneficiary's eligibility for means-tested government benefits is preserved.
Provides supplemental support: An SNT can be used to provide for the beneficiary's needs that are not covered by government benefits, including education, therapy, recreation, and transportation.
Offers flexibility and control: The trust can be tailored to meet the unique needs and preferences of the beneficiary.
Preserves family wealth: An SNT allows you to leave assets to your child without jeopardizing their government benefits.
The Consequences of Not Having a Special Needs Trust:
Loss of government benefits: If assets are directly inherited by a person with special needs, their financial resources may disqualify them from receiving means-tested government benefits.
Potential vulnerability to creditors: Assets inherited directly by the beneficiary might be subject to claims by creditors or legal judgments.
Difficulty in meeting specific needs: Without an SNT, it can be more challenging to ensure that inherited assets are used specifically for the beneficiary's needs and preferencessets in the trust are managed by a trustee, who is responsible for making distributions on behalf of the beneficiary (the person with special needs).
Examples of a Special Needs Trust in Action:
What Types of Special Needs Qualify for This Type of Trust?
A special needs trust (SNT) can be used for individuals with various types of disabilities, whether they are physical, mental, or developmental in nature. The primary goal of an SNT is to provide supplemental financial support for a person with special needs without jeopardizing their eligibility for means-tested government benefits, such as Supplemental Security Income (SSI) and Medicaid.
Examples of special needs or disabilities that may qualify for this type of trust include, but are not limited to:
Autism spectrum disorders
Down syndrome
Cerebral palsy
Intellectual disabilities
Traumatic brain injuries
Spinal cord injuries
Multiple sclerosis
Muscular dystrophy
Severe visual or hearing impairments
Mental health disorders, such as schizophrenia or bipolar disorder
Chronic medical conditions requiring ongoing care or support
It is important to note that establishing a special needs trust is not solely based on the type of disability an individual has. Instead, the decision to create an SNT depends on the specific circumstances and needs of the person with the disability, as well as their potential eligibility for means-tested government benefits.
If you are considering a special needs trust for a loved one, it is essential to consult with an estate planning attorney experienced in special needs planning to determine if an SNT is appropriate and to ensure the trust is properly established and managed.