Every parent worries about what will happen to their children after they die. This is particularly true for parents of special needs children, for whom there is unfortunately not always
The good news is that parents of special needs children have an estate planning option at their disposal to provide some security for their child—and that parents do not have to dip into their retirement savings in order to take advantage of this option! Even better, this option allows parents to not risk alienating any other non-special needs children they have, as it avoids the thorny estate planning issue of naming a child as a preferred beneficiary.
What is this amazing option? It’s a special needs trust. A special needs trust is a trust that specifically provides additional funding for an individual who was special needs and/or disabilities.
A trust lends itself naturally to providing long-term financial support for special needs children.
Many children with special needs may not be able to manage their own funds, may be more prone to people trying to take advantage of them, and may not have the capacity to secure their own financial security. The presence of a trustee, who essentially acts as a protective guardian of the trust, helps compensate for all these concerns. A savvy trustee can ensure that the funds in the trust are distributed prudently and they last as long as possible to ensure your special needs child is provided for throughout their adult life.
Another great benefit of setting up a special needs trust is that trust funds are not counted against certain income requirements that make special needs individuals eligible for certain government benefits. Medicaid, Supplemental Security Income, and Section 8 housing are examples of many government benefits commonly used by special needs children as they progress into adulthood. While giving money directly to a special needs child in the form of a lump sum inheritance would, for most special needs children, make them ineligible to receive government benefits, a trust allows them access to their inheritance while preserving their eligibility.
Finally, one of the best benefits to setting up a trust for your special needs child is that special needs trusts are not subject to probate court. What this means is that when you pass away, your special needs child is less likely to see a lengthy lack of access to necessary funds.
At Unique Estate Law, we know that providing for special needs children throughout the duration of their life can be a worrying prospect for many parents. Chris Tymchuck takes pride in helping parents craft special needs