One of the most important things you can do to plan for your child’s future is to develop an estate plan. However, if your child has special needs, there are a few extra things that should be considered. A supplemental needs trust, also called a special needs trust, is a document that bears similarity to other estate planning tools. In this case, it is designed to meet the special needs of a disabled person. In most cases, the special needs trust is put in place by parents or grandparents who want to make sure a child’s special needs continue to be met in the future.
Someone who is the beneficiary of a special needs trust will have the ability to qualify for government benefit programs, while also having the funds from the trust to use for supplemental needs, which might include:
- Vehicles and expenses related to making them accessible
- In-home healthcare and rehab costs
- Mortgage and rent payments
- Transportation and travel
- Outings and vacations
- Recreational materials
- Medical expenses
- Personal items
- Entertainment
- Luxuries
As with any estate planning tool, there are both advantages and disadvantages of a special needs trust. Having knowledge about this type of trust will allow you to ensure you’re making the right decision for your loved one with special needs. A Hodgkins personal injury lawyer can also help you with this important decision.
Advantages of a Special Needs Trust
- This trust ensures your disabled loved one continues to have financial support in the future for their treatment and care.
- You may leave monetary support that will not affect eligibility for government benefits. Medicaid and SSI both provide medical insurance covering pre-existing conditions.
- The funds may only be used to care for your loved on and take care of their needs.
- Funds in the special needs trust are tax deductible.
- Funds will be safe from any creditors and won’t be used for paying any judgments.
Disadvantages of a Special Needs Trust
- The trustee is tasked with issuing funds based solely on the terms and conditions of the special needs trust. The beneficiary does not have discretion on how funds are used, which can cause problems down the line.
- Setting up a special needs trust can be expensive and has associated annual fees. This can make it difficult to put in place. You also need a minimum amount to start a trust of this type, which some will not have access to.
- The government will require that the individual pay back Medicaid insurance money equal to the amount Medicaid used to meet the loved one’s special needs. This can cause a trust to run out of funds.
A Hodgkins personal injury lawyer can help you determine whether a special needs trust is right for you. Mary Anne Covone, P.C., Attorney at Law can help you discuss your needs and would be happy to schedule you for a free consultation. You can reach the office at 708-246-4911.
