Estate plans are exactly that: a plan for the future. They ensure your loved ones are cared for, even after you are gone. For parents whose children have special needs, the estate plan should also include considerations for their care. This can be stressful, especially if you aren’t sure what kind of care your child will need in the future or whether they will need government assistance.
A special needs trust can help. Special needs trusts specifically help people who, because of physical or mental disabilities, need help managing their finances.
Here are a few ways a special needs trust can help ensure your child is secure and well cared for:
Protect government benefits
If your adult child has special needs and currently benefits from government assistance through SSI, Medicaid or subsidized housing, providing for them in your will is a risk. Far too often, people with disabilities lose their government benefits when they inherit assets from their parents. Acquiring a lump sum of money or other valuable assets causes them to no longer qualify for assistance programs.
Provide supplementary funds
Government benefits generally provide for basic needs like housing, but a special needs trust can go above and beyond. Things that will help your child live a happy and fulfilling life, such as home furnishings, vacations, recreational activities and educational opportunities, can come from the special needs trust.
Flexible options for funding
A special needs trust can start at any time. You can choose to establish a trust and put funds into it throughout your life. Or, the trust can sit empty until one parent passes away. At that point, assets move into the trust.
Even if your child does not require government assistance for their care, a special needs trust can help you plan for their future. This type of trust can address specific needs while keeping the option open for assistance from government programs.