Parents of children with physical or mental disabilities often worry about what will happen to their children after they pass on. As it is the natural order that most parents predecease their children, this is a very valid concern.
Parents can put their minds at rest and secure their disabled children’s futures with a special needs trust. Designed for those who are incapable of managing their own financial affairs, these trusts are managed by trustees for the beneficiaries.
Special needs trusts can be designed to allow beneficiaries to continue to receive governmental benefits for which they qualify. This is very important, as to be excluded by inheritance funds from living in subsidized housing or receiving Medicaid or Supplemental Security Income can be devastating.
Special needs trusts are also protected from judgments, so in the event that the disabled adult is ever sued and has a judgment against them, those funds are untouchable.
How this works is by creating a loop where the actual funds bypass the hands of the beneficiary. Trustees use the assets in the special needs trust to make purchases for the beneficiary. These purchases can include:
— Personal care services
— Educational supplies, fees and tuition
— Medical expenses
— Recreational activities and supplies
Because every situation is unique, an estate planning attorney can draw up these types of trusts to accurately address the specific needs of the disabled adult. Contingencies can be added to cover various circumstances and needs that may arise throughout the beneficiary’s lifetime.
Parents of special needs children of all ages can benefit by learning more about this type of financial planning.
Source: Findlaw, “Special Needs Trusts FAQ’s,” accessed Dec. 02, 2016