A special needs trust is an important trust to put into place if you’re caring for a child with special needs. In your estate plan, you can establish a special needs trust that will help provide them with money and assets while protecting their right to the benefits they need in daily life.
Due to the way a special needs trust works, your beneficiary, a person with special needs, is able to obtain compensation and financial support, assets and more without having them technically in their name. What that does is make sure they can still qualify for the public assistance they need, whether they receive Medicaid, Social Security benefits, or others.
Who oversees a special needs trust?
A special needs trust is handled by a trustee. You, as a grantor (the creator of the trust) leave the trust in the hands of the trustee who handles the distributions and maintenance of the account.
A special needs trust is a great way to preserve government benefits and to help your loved one have the money or assets they need without putting their current benefits at risk. Since the assets aren’t technically in their name, they won’t be added to the person’s income or the value of their personal estate, helping them avoid the loss of benefits they need to sustain them in the long term.
What kinds of things can the trust buy for your special needs beneficiary?
The trust is able to pay out for a variety of things, including:
- Medical expenses.
- The cost of paying caretakers or medical providers in the home.
- The cost of transportation to and from appointments.
These are common items trusts pay for, but they can also be used for others.
How can you fund a special needs trust?
You can fund a special needs trust with cash or assets. You can also set up your life-insurance policy to pay out into the trust or place gifts and inheritances into the trust. In any case, the trust will hold those assets until your beneficiary needs them or the trustee is given the green light to pay them out.