If you have a special-needs child, you are entitled to certain benefits and programs that help to relieve the immense costs of your child's care. Long-term financial planning is essential to ensuring that your child continues to receive those benefits when you are no longer able to provide care.
A living trust, in general, is a legal arrangement whereby one person agrees to hold money (or other property) for the benefit of another. A special needs trust is one that is created for a person who, because of physical or mental disability, or chronic or acquired illness, at under age 65, is receiving federal and state government benefits for medical care and daily living needs, such as Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, subsidized housing and others.
The purpose of the special needs trust is to provide a source of funds without disqualifying the beneficiary from receiving those government benefits. An inheritance or gift could reduce or eliminate the beneficiary’s eligibility for such benefits because he or she may only have a maximum of $2,000 in his or her own name to qualify for them. With the special needs trust, inherited money can be protected. It simply goes into the trust and does not penalize the individual. A beneficiary can obtain certain luxuries and other care, over and above that which the government provides, without putting eligibility for his or her government checks in jeopardy.
Contact an attorney who specializes in creating special needs trusts for more information and to discuss your specific situation.
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