If you have a child or loved one with special needs, you may worry about his or her future without you. As a child’s caregiver, you cannot guarantee that you will be there for the course of his or her life. Likewise, your children may want to try to have some independence beyond you as they age. Children with special needs, however, may not be able to provide for themselves.
An SNT allows you to fund your child, regardless of his or her public assistance benefits.
As the parent of a special needs child, you need a custom estate plan that suits your family’s unique financial situation. How you plan to distribute your estate after you pass should be unique to you. Trusts allow you to speed up distributing assets after you die. For instance, you do not want your special needs child to have to deal with probate or any other long-term court process that could limit his or her care. When you set up a revocable trust, you also have control while alive. You can make changes and modifications based on your child’s circumstances.
One of the most important elements of a special needs trust is that it can protect your child’s income. If you set up a third-party trust, you or someone other than the beneficiary set up the trust with your assets. When you have a third-party trust, the Department of Healthcare Services cannot recover assets. When your child receives supplemental income, he or she has limitations on earnings. Your trust does not count as their earnings or assets.
For a child to receive government care and assistance, a trust can prevent your assets from making a difference, while still upholding your child’s quality of life.