If you have a child with a disability, you understand the challenges associated with both “regular” life and long-term planning. For a parent who has a child, or children, with special needs, some of the important issues that need to be addressed when planning for their care include:
- How do you leave funds for the benefit of your child without them losing vital public benefits?
- How do you make sure that the funds are well managed and used exclusively for the benefit of your child?
- How do you make sure that any other children are not burdened with caring for a disabled sibling, and that any necessities are spread relatively evenly among the siblings?
- What is fair in terms of distributing your estate between your disabled child and your other children?
- How do you make sure there’s enough money to meet your disabled child’s needs for the foreseeable future
Often, parents of children with special needs try to resolve these issues by leaving their estates to their other children, leaving nothing to the disabled child, in the hopes that the other children will make sure to take care of their sibling. However, there is a better way to plan for your disabled child’s care. At InSight Law, our team works closely with our clients in determining the best solution for handling their family needs.
Overview of Special Needs Trusts
Special needs trusts (also sometimes referred to as “supplemental needs” trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements, or other funds and still be eligible for certain government programs. Special needs trusts are drafted so the funds are not an “available resource” in determining eligibility for public benefits. As their name implies, special or supplemental needs trusts are not designed to provide basic support, but instead to pay for comforts and “luxuries” that are not available from public assistance. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life.ate process?
Most often, special needs trusts are created by a parent or other family member for the benefit of a disabled loved one, whether that person is a minor or adult. Such trusts also may be set up in a will or living trust as a way for an individual to leave assets to a disabled relative. Sometimes, the disabled individual can create the trust himself, depending on the program for which he or she seeks benefits.
Special needs trusts generally fall into two categories—first party (or self-settled) trusts and third party trusts. Within each of these categories are subcategories of trusts. At Insight Law, we will work with you and your family, weigh your options and create a plan for your loved one.
Learn more about trusts by watching this video:
