Providing for a Disabled Child Through a Special Needs Trust

 Posted on January 22,2020 in Estate Planning

Being the parent of a physically or intellectually disabled child comes with a variety of special challenges. When your child struggles to adequately care for himself or herself due to a disability, you may worry about what will happen when you are not around to help him or her. It can be an uncomfortable reality to consider but making plans for the care of your disabled loved one for after you pass away will give you tremendous peace of mind. One option that many parents of disabled minor or adult children utilize is a special needs trust.

How Does a Special Needs Trust Work?

A trust is a financial instrument often used in estate planning that places assets under the authority of a trustee. In a special needs trust, the trustee is legally obligated to follow the directions contained in the trust and use the funds contained in the trust for the benefit of the disabled individual. The assets held in a special needs trust can be used to pay for your child’s home, living expenses, education, personal care attendant, out-of-pocket medical expenses, recreation, and more. One way to set up a special needs trust is to name yourself as the trustee and name another trusted individual, such as another one of your children, as a successor trustee. When you pass away, the successor trustee becomes responsible for using the assets in the trust for the benefit of your disabled child.

Assets in a Special Needs Trust Do Not Limit the Beneficiary’s Eligibility for Government Programs

You may be wondering why you cannot simply leave an inheritance to your disabled child through a standard will. Many government aid programs are only available to individuals if their property and income is below a certain level. If you leave funds or property of a substantial value to your child without a special needs trust, this could raise his or her income and available resources to a level which disqualifies him or her for these aid programs. When you leave assets in a special needs trust, the assets are not considered income or available resources so this does not limit your child’s eligibility for need-based government programs such as Supplemental Security Income (SSI) and Medicaid.

Contact a Lombard Special Needs Trust Lawyer

Special needs trusts that do not meet the mandated criteria are not valid and could lead to your child being disqualified from the benefit programs on which he or she depends. To ensure that your special needs trust is drafted correctly and adequately provides for your child’s needs, get guidance from an experience DuPage County estate planning attorney. Call A. Traub & Associates at 630-426-0196 today and schedule a consultation to discuss your estate planning needs.

Sources:

https://www.forbes.com/sites/robclarfeld/2018/12/17/special-needs-trusts-what-they-do-and-how-they-work/

https://www.cnbc.com/2017/10/25/how-to-set-up-a-special-needs-trust.html