Having a child who has a disability can be challenging for any parent. Not only must you find care and accommodations for your son or daughter, but you must also ensure he or she has the necessary funds to thrive after your death. Still, giving money to your child may jeopardize his or her eligibility for means-tested government benefits.
If your child’s disability makes it difficult or impossible to work, he or she may qualify for Supplemental Security Income, Medicaid or other government programs. While often meager, the benefits these programs offer may be tremendously useful for your son or daughter. A special needs trust may allow your child to receive government benefits while also accessing funds from the trust.
1. Retain eligibility for means-tested benefits
To qualify for means-tested public benefits, your child likey must have limited wealth. Because the special needs trust holds funds for your son’s or daughter’s benefit, it usually does not affect eligibility for government benefits.
2. Provide access to funds for supplemental expenses
Your child may not use disbursements from the special needs trust to pay for the same things government benefits cover, such as food, housing, utilities and basic medical care. Anything else, though, is probably ok.
Therefore, your son or daughter may use funds to pay for out-of-pocket medical care, recreation, hobbies, training, education, home improvements and other supplemental items.
3. Name a trustee to look out for your child
If you worry your child may not receive the care he or she needs after your death, setting up a special needs trust may put your mind at ease. After all, the trustee you name to oversee the trust may help your son or daughter access necessary services and receive appropriate care.
When planning your estate, you likely have many options for addressing your assets. Using your estate plan to protect your child’s future, though, may help you both to cement your legacy and to protect your son or daughter.