Special Needs Trust For Disabled Beneficiaries
Most parents in Polk County want to make sure that when they are gone from this world, their children will be able to carry on and thrive. For most families this means setting up an estate plan that passes the parent's assets down to their children. In some cases, however, this kind of planning might not be so simple.
When a child has a disability the parents may need to consider other options besides simply leaving their assets to that child. For example, a child with a mental disability might not be able to properly manage the inherited assets or use them properly. In addition, a disabled child could become ineligible for crucial government benefits if he or she were to inherit assets.
As little as $2,000 in assets could make a disabled person ineligible for programs like Supplemental Security Income, which might be vital to their well-being. Thus, parents who are concerned about the financial viability of their disabled children, but also want to make sure they can get government benefits, may want to set up a special needs trust.
Like other trust instruments, the special needs trust is established when the parents deposit assets in the trust. A trustee then oversees the assets on behalf of the disabled beneficiary. The child does not own the assets and they cannot disqualify the child from government programs. This means the disabled child can get basic needs from government programs, but the trustee can distribute trust funds for things that might not be covered under public aid, like caregiver costs or even educational expenses.
Providing for disabled children is just one of the many functions trust instruments can serve. An attorney experienced in trust administration can discuss the wide variety of benefits trusts have to offer. Likewise, he or she can tailor a trust to fit the specific circumstances of a family's situation.
Source: CNBC, "Special-needs trust is key part of some estate plans," Ana Robaton, June 1, 2016. On behalf of J. Kelly Kennedy, Attorney/CPA, PLLC posted in Trust Administration on Wednesday, June 8, 2016.