When it comes to parenting, you know your child better than anyone else. The same is especially true if your child is special needs. You know their routine and the environment that they thrive in. You also understand what it is they will need as they grow and continue through life.
Keeping these needs in mind is especially important when putting together estate plans. While there are many reasons anyone could benefit from having a trust set up, it is particularly beneficial for your child if you set up a special needs trust. This can help them both now and into the future, especially when it comes to protecting their access to government benefits.
Special needs trust keeps assets low enough for benefits
If your child does receive – or will receive – government benefits, such as Supplemental Security Income, their assets cannot total more than $2,000. If they have assets over $2,000, this could result in no longer being able to receive benefits.
A special needs trust offers protection from losing benefits, as it’s the trust that is the beneficiary of the assets – not the child. The trust is then utilized on behalf of the child to pay for supplemental needs, such as transportation, education, home health aides and other needs that are typically not covered by governmental benefits.
Funding the special needs trust
Assets that will benefit your child should be used to fund the trust. This means not only having the trust listed as a beneficiary on retirement benefits and life insurance policies, but to also make sure other family members are aware of this special needs trust. This way, if let’s say grandma or grandpa want to write the child into their will, they know to actually have it set up so the assets transfer to the trust – not the child. Again, this is especially important to ensure your child can continue to utilize government benefits.
Another benefit to a special needs trust is that it can be accessed during your lifetime too. You do not need to pass away for your child to have access to the funds. Just make sure to share how you intend to use the trust with your attorney, who can then make sure the trust is set up in a way that best benefits your child now and into the future.