If your child has a disability, you may wish to consider creating a special needs trust as part of your estate plan. While not always necessary, there can be considerable advantages to doing so. Here are some reasons you may wish to create one.
A special needs trust protects the right to claim government assistance
Supplemental Security Income (SSI) and Medicaid are means-tested. Putting money into a special needs trust prevents government officials from counting it toward the threshold.
It prevents others from mismanaging the assets
Depending on the disability, your child may be unable to manage the money. By putting it in a trust, you designate someone to do this for them, reducing the chance that someone unscrupulous can steal it from them.
It protects the assets if you die with debt
If you owe money when you die, your creditors can claim against your estate. By placing the money in a trust, you protect it from their grasp. It will do the same if your child racks up debt during their life.
It leaves some funds for you
It can be easy to focus on your child and forget yourself. Yet, if you do not create a trust for your child, and they cannot claim government assistance, you will pay all their costs. You could have nothing left for your retirement, especially if you need care.
A special needs trust brings peace of mind
One of the biggest worries as a parent of a child with a disability is what will happen to them if you die. By setting money aside in a trust, both you and your child gain security over the future.
There are several different types of special needs trust available. Seek legal help to understand more and choose the best option to assure your child’s future.