If you are the parent of a special needs child you undoubtedly worry about how your child will be cared for and provided for in the future. The day will come when you will no longer be here to see to your child’s daily needs or financial needs yourself. To ensure that your special needs child continues to have your financial support without jeopardizing his or her eligibility for much needed assistance programs you may wish to consider creating a special needs trust.
Fortunately, in the United States there are a number of federal and state assistance programs that provide a wide range of services and help to special needs children and adults. Medicaid, SSI, and public housing, for example, are programs that can help a special needs adult live as independent a life as possible. These programs, however, all have income and resource limits. Regardless of your child’s mental or physical capabilities, the law will consider your child to be an adult at some point in the future. Therefore, your child’s eligibility for these assistance programs will be evaluated based on your child’s income and resources. Although you may wish to leave assets to your child to ensure that he or she is well cared for when you die, doing so could jeopardize eligibility for programs such as Medicaid, SSI, and public housing. A special needs trust solves this dilemma.
Also referred to as a supplemental needs trust, a special needs trust is a trust that is structured in a way that allows you to leave funds to “supplement” the needs of a special needs individual without risking the much needed assistance provided by state and federal need based assistance programs. All too often, well-meaning loved ones leave funds to a special needs family member in a Will, without understanding that those funds, if left directly to the special needs individual, could actually do more harm than good. By creating a special needs trust, any funds earmarked for a special needs individual can be funneled through the trust, ensuring that benefits are not lost.
For a trust to be recognized as a special needs trust very specific language must be used in the trust documents. Failing to use the proper language can defeat the entre purpose of the trust. For this reason, it is essential that you consult with an experienced estate planning attorney if you believe that a special needs trust is needed to help protect and provide for a special needs individual in your life.