When you have a child with special needs, his or her care is always on your mind. In addition to his or her current care, as the parent, you have to plan for your child’s future also. In the unfortunate event that you are not there in his or her future, you need a plan in place to ensure that your child has his or her needs fulfilled. Will your child have financial security in the future? Can you provide that security? Special needs trusts are options that provide security for your child.
According to Forbes, a special needs trust creates a legal relationship between the beneficiary, the donor and the trustee. This trust funds those who have a chronic illness, disabilities or any other special needs.
If your child cannot manage funds, he or she is more likely to suffer from people taking advantage of him or her. Trusts also keep the government from accessing the money. For instance, if your child needs supplemental benefits from the government, the government will not have access to the trust. When a child inherits money in another way, the government may use the money to cut off supplemental programs. When you have a trust, the government cannot include the money and your child will still receive his or her benefits.
For instance, if your child needs SSI, he or she cannot have money that exceeds $2,000 in his or her bank account. If you leave your child a lump sum inheritance, this will cancel out those benefits.
The above is for educational purposes only. It is not legal advice.