As difficult as it can be to care for a child with special needs, planning for their care after you have passed away can be even more daunting. In addition to ensuring that they have the proper housing, medical attention, and personal assistance, it is essential to ensure that you have the right money management framework in place.
Funding for the Future of a Special Needs Dependent
For parents of children with special needs, targeted and thorough estate planning is even more important than it is for others. To support ongoing money management for your child, you will likely want to go beyond a standard will to establish a trust.
A trust is a legal agreement that can guarantee specific rights to earmarked assets to support your offspring in the event of your death. Trusts specify one party, a trustee, who holds legal title to these assets, managing them to benefit another party, the beneficiary.
Trusts can make optimum tools when it comes to providing for a child with special needs. By leaving your child in the hands of a trusted and capable money manager, you can rest easy in this life and the next.
A designated life insurance policy is generally the easiest and least expensive way to fund a trust. Furthermore, you can construct this life insurance policy so you will know precisely what will be leftover from your estate to provide a nest egg for your child.
Establishing a Special Needs Trust
If your child receives Social Security Disability, Medicare, Medicaid, Supplemental Security Income, SNAP food assistance, or other government benefits, you will probably want to create a particular type of trust called a special needs trust. This financial tool shields its assets, giving your child the financial resources to meet ongoing and future expenses without an interruption in access to stipulated government benefits. In short, a special needs trust won’t interfere with eligibility for most federal and state assistance programs.
When it comes to establishing a special needs trust, the first and most important step is choosing a trustee who will faithfully administer it with the best interests of your dependent at heart. In addition to following all stipulated guidelines exactly as you have written them, this trustee must adhere to all relevant state and federal legal requirements.
The key to a special needs trust lies in the fact that all assets are owned by the trust itself rather than its beneficiary. This places assets under the capable management of your chosen trustee while allowing your child to collect the government benefits that he or she deserves.
To Learn More
For more information about money management for children with special needs, supplemental needs trusts, and estate planning in general, contact the disability law experts at Beasley & Ferber. A law firm representative is eager to answer your questions or direct you to a seminar that covers these specific subjects among others.