Planning for your disabled child’s future involves special considerations, as you may have to figure out who will provide for your son or daughter once you are no longer around to do so yourself. In addition to financial considerations, you must also consider factors such as medical care, where your child will live and so on, but getting these matters squared away can help minimize stress and improve your peace of mind.
A common method parents of disabled children use to prepare for the future involves creating a special needs trust. In addition to helping you set aside money for your disabled child’s future, a special needs trust also offers you and your child a level of protection against him or her potentially losing access to government benefits after your passing.
Understanding the special needs trust
To create a special needs trust for your child, you will have to appoint a trustee who will oversee it. You can fund the special needs trust in a number of ways, and many people do so using life insurance policies and other assets that do not directly belong to the disabled child.
This type of trust offers several key benefits. First, a special needs trust is structured in such a way that the assets it contains do not belong directly to the beneficiary. This means that, in the event that the beneficiary passes away, the assets in the trust can go toward charitable causes, or to other family members, as opposed to going toward reimbursement for Medicaid.
Additionally, chances are, your disabled child currently receives some type of public assistance, whether it be Medicaid, Supplemental Security Income or something similar. Eligibility for many of these programs is based on financial need, so if you leave your disabled child considerable assets in, say, a will, the money left may disqualify him or her from being able to receive public assistance. When you leave assets in a special needs trust, however, those assets do not factor in when determining public assistance eligibility.
In summary, a special needs trust can help you safeguard your disabled child’s future, so establishing one may prove well worth considering.