Parents who have a special needs child often worry about what is going to happen to their child when they aren’t there to care for them. Unfortunately, this huge concern doesn’t always have an easy answer. One thing that the parents can do is to ensure that their estate plan sets up the best scenario for the child.
Special needs children and adults who receive government assistance, including Medicaid, are participating in needs-based programs. This means that they can lose their benefits if they have too many assets in their name. In most cases, the loss of these benefits would be devastating. Because of the limits set by these programs, the parents can’t just leave assets to the child through a will.
One option that is possible in many cases is using a special needs trust to provide the child with financial support in a way that can help them without costing them their benefits. By using this option, the parent can stipulate that the funds of the trust are to supplement the child’s life and not to support them.
A special needs trust is unique because it keeps the assets held in the trust out of the child’s hands and technically doesn’t count toward the asset limits for needs-based programs. Instead of the child controlling the trust, a trustee maintains the control. They can help improve the quality of the child’s life with the trust, but they will never hand money directly over to the child.
If you are in the position of having to worry about what is going to happen to your special needs child when you are gone, now is the time to learn about the options you have for your estate. You need to get everything set up before something does happen to you.