When you have a child with special needs, you spend a lot of time making sure your child receives the right type of care, education and support. You often think about your child’s future and what it will look like. As part planning for your child’s future, you should establish a special needs trust when you create an estate plan. You want to ensure your special needs child has the financial support they need after you are gone.
Establishing a special needs trust
Many parents opt to establish a third-party special needs trust for their special needs child. With a third-party special needs trust, you appoint a third party to manage the trust when you die. Third-party special needs trusts have many advantages:
- You can have someone you trust manage assets for your child. Your child won’t be manipulated in giving someone untrustworthy their inheritance.
- If your child can’t manage money on their own, you have appointed someone else to do that for them.
- You can protect your child’s Medicaid eligibility with a special needs trust, specifying that the money in the trust only go to fund specific things. For example, maybe you want to ensure your child has nice furnishings in their group home room or has money to buy good art supplies. Maybe you want to set aside money for your special needs child to take a vacation with a sibling each year. You can specify that the third-party trust funds those items.
- With a third-party trust, you can avoid having to pay back Medicaid when your child dies. Instead, you can have another beneficiary receive whatever funds remain in the special needs trust.
Getting help to establish a special needs trust
If you haven’t completed an estate plan or set up a special needs trust for your child, you should consult an experienced estate planning attorney. You want to ensure you set up the right type of trust for your child and maintain their eligibility for government benefits.
With a special needs trust in place, you know your child won’t suffer financially when you pass away. You know you will have protected their best interests for many years to come.