North Carolina parents may need to spend a great deal of money to ensure that their special needs child is properly taken care of during his or her lifetime. While the amount that is needed may seem astronomical, there is a way to obtain the necessary cash with careful planning.
In one case, a family that determined they needed $3 million dollars to pay for the expenses for the lifetime care of their 23-year-old autistic son opted to create a special needs trust supported with life insurance so that the son would be provided for after they die. The use of a special needs trust is only one method that is available to those who not only need help covering the costs associated with supporting their special needs children but also want to preserve any benefits that their children may be eligible for from Medicaid and the Supplemental Security Income program.
Also referred to as a supplement needs trust, a third-party special needs trust is funded with assets that are owned by someone other than the disabled individual. The assets may include life insurance policies and other types of assets. Another option is the ABLE account. It is a savings account for individuals with disabilities that was established in 2014 by the Achieving a Better Life Experience Act and that provides certain tax benefits.The estate planning tools that are needed will vary from case to case. However, according to a wealth adviser, a good plan can consist of both an ABLE account and a special needs trust.
As quite a bit rides on it, the preparation of a special needs trust should be done by an attorney. If it is properly constructed, the federal government will not be able to seek Medicaid reimbursement out of the trust's assets when the beneficiary dies.