If you have a special needs child in your family, you are already aware that caring for that child requires a considerable amount of time and caring. The reality is that it also requires a considerable amount of money. Because you love your family member, you may not wish to focus on the financial costs involved in raising a special needs child, but at some point you must address the issue because you will not always be here to oversee his or her care. A special needs trust in Missouri may be the answer.
Thanks to advances in science, medicine and technology over the past several decades a special needs child can expect to grow up and live a fairly independent life in many cases. Your special needs child will likely continue to need support and assistance though. In most cases, this support and assistance comes from federal programs such as Supplemental Security Income, or SSI, and Medicaid. Those programs, however, have income and resource limits that must be taken into account. For this reason, you cannot simply gift assets to your special needs child in your estate plan because your child’s assets will then make him or her ineligible for assistance.
Creating a special needs trust – sometimes referred to as a supplemental needs trust – in Missouri is a solution to the problem of over-funding your child’s estate. A special needs trust works in much the same way as any other trust in that you need to appoint a trustee and a beneficiary (your child) as well as designate assets to fund the trust. The trust assets can then be used for “supplemental and extra care over and above what the government provides.” Basically, government programs will pay for costs of care first and then the trust assets can pick up any remaining costs.
For a trust to meet the legal definition of a special needs trust it must follow very specific guidelines. If the trust doesn’t meet the federal definition of a special needs trust it can cause your child to lose much needed benefits from federal programs. For example, the trust must be irrevocable to qualify. In addition, specific language must be used in the creation of the trust. If you successfully create a special needs trust, however, you can rest assured that funds will be available to help provide your child with an excellent quality of life long after you are gone.
Be sure to talk to your estate planning attorney if you think a special needs trust should be incorporated into your estate plan.
- Staying Current is Especially Important in the Pandemic - November 17, 2020
- Staying Current is Especially Important in the Pandemic - October 1, 2020
- How Will You Age in Place and Be Able to Die at Home? - August 16, 2020