Like many people, you may think in terms of passing down your assets to loved ones when you think about estate planning. That may, indeed, be the primary focus of your estate plan; however, you will likely need to include additional goals and objectives within your plan as well in order to ensure that you, your assets, and your loved ones are protected and provided for both now and in the future. If you are the parent of a child with special needs, for example, you will undoubtedly want to include special needs planning in your comprehensive estate plan. Specifically, as part of your special needs planning component, you may decide to create a Missouri special needs trust.
Raising a Child with Special Needs
As a parent, you undoubtedly do not want to think of your child in financial terms; however, as the parent of a child with special needs, you know that caring for your child can be costly. Depending on your child’s diagnosis, you may incur ongoing Medical bills, need to cover the cost of therapy, and purchase specialized equipment for your child. Moreover, the expenses involved in caring for a child with special needs do not end when the child becomes an adult. On the contrary, it often becomes more expensive to care for an adult child with special needs than it was to care for your child when he/she was younger. Fortunately, you may be able to rely on assistance programs, such as Medicaid and Supplemental Security Income (SSI) to help with the costs involved in caring for a child with special needs. If you are not careful though, you could jeopardize your child’s eligibility for these programs by leaving your child a direct gift in your Will.
What Is the Problem with Leaving a Direct Gift?
The various government assistance programs may be able to provide your child with sufficient resources to cover basic living expenses; however, as a parent you want your child to have more than the basics. Knowing that your child will likely continue to need assistance and financial support when he/she is an adult, you may wish to make provisions for your child in your estate plan that ensure your child will be well cared for after you are gone. The problem is that once your child becomes a legal adult, assets you gift directly to your child will become part of your child’s estate. Consequently, those assets will be counted when determining eligibility for programs such as Medicaid and SSI. Your well intentioned gift (or that of a grandparent or other loved one) could result in the loss of eligibility for these much needed assistance programs.
How Can a Missouri Special Needs Trust Help?
Having established that leaving assets to your child in the form of a direct gift in your Will is not a good idea, another option is necessary. Fortunately, there is a better option — a special needs trust. A “special needs trust”, also referred to as a “supplemental needs trust,” is a specialized trust that can be used to provide “supplemental” care to a special needs individual above and beyond the care provided by state and federal assistance programs such as Medicaid and Supplemental Security Income (SSI). A properly drafted special needs trust can provide funds that can be used to pay for things such as vacations, transportation, and numerous other things your special needs child may need. There are also certain things a special needs trust cannot be used to pay for though pursuant to federal laws that recognize these trusts. For a trust to be recognized as a special needs trust by the various state and federal assistance programs, therefore, very precise language must be used in the trust agreement documents. This is one of the many reasons why it is important to work closely with your Missouri estate planning attorney during the creation of your special needs trust.
If you have additional questions or concerns regarding special needs planning, or if you are ready to get started creating your special needs trust, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.