Brendan J. King
Parents of a special needs child face life-long challenges for their child, their families and themselves. Among those challenges, they are confronted with:
- Learning and understanding as much as they can about the disability and how to best manage their child’s future
- Dealing with their child’s social and emotional needs
- Understanding the special education landscape
- Becoming an advocate for their child
- Coping with the changes in their lives and keeping the family unit intact
- Overcoming the financial challenges to support their special needs child
One of the longer-term concerns of special needs families is how their child will be cared for financially when they are no longer able to do so. Concerns about current or future eligibility for programs such as Medicaid and Supplemental Security Income (SSI) compound these issues, since inheritance of assets could jeopardize such benefits.
The solution is to create a Special Needs Trust (SNT). SNTs help ensure that the health and welfare needs of your special child are met, and many parents are taking advantage of them. The benefits of SNTs include:
- They can be structured to keep the beneficiary eligible for SSI, Medicaid and other government benefits while paying for personal items and care that are not covered under those programs
- They ensure that the funds are used only for the care of the special needs beneficiary
- The funds are not available to creditors or for paying judgements
Generally speaking there are two types of SNTs. With a first party trust, the special needs individual funds the trust with his/her own assets, while third party trusts are structured to hold funds that another person – commonly a parent or grandparent – wishes to leave for the benefit of the individual. Should funds remain after the passing of a special needs person, they may be distributed to contingent beneficiaries who are named in the trust document. However, with the first party trust, the state must first be paid back for benefits paid on the beneficiary’s behalf during life; therefore, a person wishing to leave an inheritance for a special needs beneficiary should consider the use of a third party trust.
While an SNT does not resolve all of the challenges that you face as a parent, it does provide security for your child’s future. The first step is a meeting to explore the best solutions for your family. In choosing a firm to create your trust, be selective; that firm should have an understanding of special needs and extensive expertise in creating special needs trusts. We have personal experience with special needs and are poised to help develop your child’s trust.
For additional information, click on Ignoring Special Needs Planning Puts Your Loved One at Risk