As a parent of a special needs child, you may have concerns about what is going to happen to your son or daughter once you are no longer around to provide care. In addition to concerns about who is going to care for your disabled child in your absence, you may also wonder exactly how you are going to pay for your child’s care after your passing. Increasingly, parents of special needs children who are facing similar scenarios are creating what are known as special needs trusts.
Just what is a special needs trust?
How a special needs trust works
A special needs trust gives you a channel through which you can set aside assets for your disabled child and make plans for his or her future. You can fund a special needs trust through any number of different methods, among them life insurance policies, family assets, lawsuit awards and so on.
Benefits of a special needs trust
In addition to helping set your disabled child up for the remainder of his or her life, a special needs trust gives you a method through which you can leave your child assets without worrying that doing so will disqualify him or her from public assistance eligibility. For example, chances are, your special needs child currently utilizes public assistance programs, such as Medicaid or Supplemental Security Income. The problem is, if your child has too many assets at his or her disposal, this can make him or her ineligible for receiving public assistance, as recipients must undergo means testing to qualify. Assets in a special needs trust do not factor in during means testing, making this a safe, effective way to preserve your wealth for your disabled child.
If you wish to leave as much of your estate behind as possible, but you do not want your child to lose government benefits, consider creating a special needs trust.