Protecting Your Special Needs Child’s Future
It is an unfortunate truth that as parents, we will not live forever. The parental fear of our children struggling after we are gone, unable to fend for themselves or support themselves, is one that accompanies this haunting thought. This fear is undoubtedly stronger for parents of special needs children. Luckily, there are options and one way that you can protect your child in the future is with a special needs trust.
A special needs trust is set up as a supplemental savings account to the benefits issued by government aid programs. A trust will typically be handled by a trustee, who will oversee the fund’s distribution to the beneficiary. As the donor to the trust, you can explain how you would like the funds to be managed, when they should be distributed, and how care should be managed. With the help of an estate planning attorney from our team at Casey, Simmons, & Bryant, PLLC you can make sure that your child will be provided for after you are gone.
Why Create a Special Needs Trust?
The biggest advantage of a special needs trust is that it is not money left directly to a beneficiary (like an inheritance) so it does not affect the assistance provided by the government. Because your child may not be able to manage the money him or herself, the trust allows funds to be supplied while being managed by a third party, making sure that your child is taken care of financially while not inhibiting any money that the state or federal government awards.
Unfortunately, if the trustee pays for food or housing with the funds, it may reduce the amount of money that the government awards by 1/3. Management of trust fund money will need to be specifically allocated to make sure that the funds go towards living expenses that will not affect the government funding. These complicated rules are one reason that it helps to have the guidance of an educated, experienced attorney from our team.
What Kinds of Trusts Are There?
There are two main types of special needs trusts: first-party special needs trusts and third-party special needs trusts.
- A first-party special needs trust is awarded directly to the beneficiary by way of money, property, or a court settlement. There are specific rules that apply to a first-party trust, including the stipulation that any remaining funds left after the beneficiary passes on be repaid to the state for Medicaid awarded assistance.
- Third-party trusts are the more common choice for parents and guardians of special needs children. These most often name a trustee to oversee the allocation of the funds. These can be created along with a will or living trust. There can be multiple donors to a third-party trust, which helps families that are not able to contribute large amounts but are aware of the realistic costs of maintaining a life after passing. Third-party special needs trusts are not required to be paid back if the beneficiary passes on.
Our team of estate planning attorneys can help you determine which trust is best for your circumstances and will work with you to create a detailed plan for care and distribution of funds.
Securing Your Special Needs Child’s Future
If you are the parent of a child with special needs, you may be wondering how you can best protect their future and make sure that things will be taken care of when you are gone. Our team of special needs trust lawyers at Casey, Simmons, and Bryant, PLLC can work with you to create a special needs trust, so that you know that there is a plan that covers your concerns. The peace of mind that a trust provides is worth more than words can say, as it helps to make sure that your child will be okay when you are gone.
Contact our team at (731) 256-0023 to discuss how we can help today.