When it comes to estate planning, parents of children with special needs have added concerns. They understand the likelihood of their children outliving them. However, such parents want to make sure that their special needs children – who are not independent in many areas – will continue to be provided for once they have died.
This is where a special needs trust comes into play, serving as an effective estate planning tool. A special needs trust allows you to set aside money to care for your child for the rest of his or her lifetime. The money from the trust will allow your child to maintain a certain lifestyle to which he or she is accustomed.
Talk to family, name trustee
A special needs trust may pay for things such as medical expenses, certain equipment such as a wheelchair or van, education, computers, therapy, training and guardianship-related expenses. This estate planning route is more realistic than an inheritance.
Here are some important steps to take and consider when pursuing a special needs trust:
- You may need assistance to fund it. Have a family meeting and include trusted and loving members willing to contribute funding.
- You likely need at least $100,000 in funding the trust. However, that is on the low end. This money may have to last for 40 years, so you may need as much as $1 million.
- Select a reliable and trustworthy person as trustee. This person oversees the trust, paying for the equipment, treatment, education and whatever else your child needs.
- If your child receives an inheritance, this money can prevent him or her from obtaining critical public benefits such as Supplemental Security Income, Medicaid and food stamps through the Supplemental Nutrition Assistance Program (SNAP). This would not happen with a special needs trust.
Estate planning provides you and your family with great peace of mind, and so does a special needs trust as part of an estate plan. While a special needs trust is complex, it serves as an effective tool providing for your child. Do your research, talk with your family and work with an empathetic and experienced estate planning attorney.