If you are a parent of a child with special needs, ensuring that they are taken care of in the future is a great concern. This concern can be addressed by creating an estate plan that will provide the necessary funds and information for anyone who may be responsible for carrying for the special needs individual in the future.
Special Needs Trust and Government Benefits
Individuals with special needs often receive government benefits, such as Medicaid or Security Supplemental Income (SSI) to help them cover costs of living. However, to qualify for those benefits certain requirements must be met, including limits on the amount of assets or income that the special needs individual may have in his or her name. Yet, creating a special needs trust and contributing to it will not affect the person’s eligibility.
Parties in the Trust
Grantor is the creator of the trust and also the person (may be one of few) who puts some assets into the trust. Special needs trusts can also be funded with assets from other family members, who wish to contribute.
Trustee is the person responsible for overseeing the collection and distribution of funds in the trust. Grantor and trustee can be the same person, allowing the grantor of the trust to control it during his or her lifetime. A successor trustee is also named in the trust, and that person takes over the managing of the trust once the initial trustee passes away.
The third party in the special needs trust is the beneficiary. That is the special needs person for whose benefit the trust was created.
How Does the Special Needs Trust Work?
If you as a parent set up the special needs trust and name yourself as the grantor and the trustee, you will be able to access the funds in the trust during your lifetime to pay for the beneficiary’s needs, as long as they are not covered by the government benefits.
Some of the expenses that the special needs trust funds can be used for include:
- Personal care attendant;
- Out of pocket medical expenses;
- Purchasing assistive devices, such as improved technologically wheelchair;
- Paying for medical transportation;
- Costs of special educational programs; and
- Funding travel, entertainment and other life enhancing activities.
In order to ensure that the usage of special needs trust funds does not jeopardize the individual’s government benefits, ask yourself, is the thing the funds will be used for, a basic care need for the special needs person? Is that basic need covered by any of the government benefits? If you answered yes to either one of the questions, special needs trust funds should not be used.
We Can Help
To learn more about how to create a special needs trust and how to secure your child’s future, call us today. At Sobon Law LLC LLC we work with clients every day to protect their assets and their loved ones. Call today (440) 271-3581 to schedule an appointment.