When you've got a child with special needs, your professional advisors have hopefully discussed the importance of special needs planning for your child. The most common manner of planning is to use a special needs trust. It's a specific kind of trust that is specifically created for a person with special needs to manage their assets for them. The reason it's a special type of trust is that it is created to make sure that a person with special needs who is receiving government benefits is still able to qualify for their benefits if they are receiving an inheritance. If it's improperly created, you risk your child not being able to receive their benefits and being left without a safety net if your inheritance to them runs out.
What Can't The Trust Pay For?
If your child is receiving benefits from the government through Supplemental Security Income (SSI) or Medicaid, those programs provide for essentials for them. Some examples of the essentials include food, shelter, clothing, and medical care. When you are creating a special needs trust, you want to make sure that the trust is not paying for these types of essentials.
One other caution when leaving money in a special needs trust is to make sure that you aren't leaving behind money as "cash" to your child. If it's left without a clear plan, the government could use that amount to reduce your child's benefits.
What Can The Trust Pay For?
Your special needs trust can be set up to pay for things that are above and beyond the essentials. Some examples that I have run across in the past,
- Transportation expenses (a car, a Metrocard, Uber/Lyft expenses)
- Vacations and travel
- Assistance with starting a business
- Medical expenses not covered by the government (therapy, rehab)
- Education and training
- Technology (computers, other electronics)
- Legal expenses
- Insurance
These expenses tend to be beyond what the government considers to be "essential" these days (although items like education and computers seem like essentials to all of us these days). You can be even more creative in what you provide for in your special needs trust, but this list is a good start for you to start thinking about what you can provide for your child.
You May Also Like
- What is a Special Needs Trust?
- Talking With Your Family About Your Will
- What is a Testamentary Trust?
Next Steps
If it's time to get your special needs planning together for your children, let's set up a complimentary Legal Strategy Session to discuss the best options for you and your family.