As the parent of a disabled child, you probably have some concern about your son’s or daughter’s future. If you want to continue to provide for your child after your death, you may want to consider forming a special needs trust.
A special needs trust does not transfer ownership of your assets to your disabled child. Instead, funds remain in trust for your son’s or daughter’s benefit. As a result, the funds do not typically interfere with needs-based government assistance.
Improve quality of life
While your disabled child may be eligible for Medicaid, Supplemental Security Income or another income-measured public program, government assistance typically does not cover more than basic living expenses and medical care.
When you establish a special needs trust, you give your son or daughter access to trust disbursements that improve his or her quality of life. While your child may not use trust funds for ordinary expenses, he or she may access the trust for supplemental ones.
Among others, acceptable expenses usually include the following:
- Medical co-pays, out-of-pocket expenses and special devices
- Recreational items and athletic equipment
- Travel costs and restaurant meals
Protect your assets
For parents of disabled adult children, a special needs trust is often one element of a comprehensive estate plan. This type of trust also serves another important purpose: protecting your assets.
When you form a special needs trust, you name a trustee to oversee it. This trustee has a fiduciary obligation to provide for your child’s needs while safeguarding your assets.