Planning is key to creating a solid special needs trust for children who have been born with or attained a mental or physical disability. Such a financial vehicle may ensure that your children will retain a quality of life at least on par with what they had when you and other loved ones were alive to help care and love them.
A special needs trust or supplemental needs trust provides money for disabled children without disqualifying them from government benefits such as food stamps, Medicaid and Supplemental Security Income payments, which require recipients to have no more than $2,000 in assets and provides limits on income.
Team of family members, attorneys, financial advisers
When considering the special needs trust route, it’s best to assemble a strong team that would include attorneys, financial advisers and family members, who are committed to contributing money to this trust. Experts recommend a minimum of $100,000 to fund a special needs trust. But in some cases, it may be double that amount. Ideally, the funds within a special needs trust may have to last for 30 years or more, so plan wisely.
When setting one up, parents must determine how to fund the trust and who to appoint as trustee. Usually, companies that specialize in managing such trusts are assigned the trustee task, though family members also may be considered.
Providing for a loved one with special needs
Among the reasons for attorneys and financial advisers being on board are that rules of a special needs trust can be complex and detailed. For example, while a special needs trust can pay for education, clothing and health-related needs including wheelchairs and hearing aids, it cannot be used to pay for food and shelter. Money from the trust must benefit the beneficiary and not the family.
A special needs trusts may prevent financial abuse of a disabled person, and ensures that the money within it is wisely spent. You want to make sure that your loved one with special needs is provided for after you die. This trust can help.