Should I Use a Special Needs Trust to Provide for a Disabled Child?

 Posted on November 23, 2022 in Estate Planning and Administration

If your child has a severe physical or mental disability, you know just how important it is for them to have the right type of care. One concern many parents have is what will happen to their disabled child after they have passed away. Your child may depend on you for daily needs like bathing and eating as well as money management and other financial needs. How will your child receive care and assistance after you are no longer around to provide this care yourself?

A special needs trust is an estate planning instrument that allows you to place funds in a trust that are used for your child’s benefit. Read on to learn more about the advantages of using a trust and what you can do to get started.

Basics of a Special Needs Trust  

A special needs trust or supplemental needs trust is a fiduciary relationship often used to transfer funds to benefit a disabled person. The person who creates the trust, the grantor, transfers money into the trust. A trustee is tasked with managing these funds and using the money to benefit the beneficiary. Trust funds may be used to pay for medical needs, caretaking or home healthcare expenses, transportation, and other needs.

Benefits of a Special Needs Trust

When compared to a will, a special needs trust has several advantages. If you leave your child a lump sum of money through a will, it is possible that the money will not be used appropriately. Furthermore, leaving money directly to your child can reduce his or her eligibility for government benefits. Most government assistance programs require that the recipient’s financial resources and income fall under a certain limit. If the person needing assistance has received a large sum of money through a will or other estate planning tool, he or she may be unable to receive benefits through Social Security or Medicaid.

A special needs trust eliminates this dilemma. Because the funds are owned by the trust and not the individual, they are not counted as financial resources owned by the individual.

Contact a Hood County Special Needs Trust Lawyer

Special needs trusts are estate planning tools used to provide funds to a disabled person without risking their access to government benefits. If you would like to learn more about how a special needs trust can benefit you and your family, contact our Tarrant County estate planning attorneys. Set up a confidential consultation today by calling 817-645-1717.

Source:

https://www.investopedia.com/terms/s/special-needs-trust.asp