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Special Needs Trust: Estate Planning for Your Disabled Child

On Behalf of | Sep 4, 2013 | Estate Planning

When considering your estate planning options, why is a special needs trust necessary?

Being a caregiver for an individual with special needs is a full-time job. It can be very hard to keep track of everything that they need from day-to-day, let alone take the time to plan for the future. Individuals with severe disabilities who are unable to work will seek benefits from publicly funded, income-based programs, such as Supplemental Security Income (“SSI”), Medical Assistance. Such programs have set caps on the income and assets an individual can have. An individual with too much income or too many assets will not qualify for these programs. There can be big problems for these individuals if no special needs trust is in place. For example, the parent of a disabled child dies, leaving $20,000 to the child. The parent leaves this money with the goal of providing for the disabled child throughout their lifetime. The disabled child, who was receiving SSI and Medical Assistance, is knocked off these benefits and is forced to spend almost all of the inheritance on his own care. After a few months, the money is spent, and the child goes right back on the public assistance programs. He is right back where he started and the parent’s generous inheritance is gone. Circumstances such as this, where an individual is disabled and is or will be unable to earn a living, are ideal for a special needs trust.

A special needs trust is a vital tool, which is used to supplement public benefits and enhance the full duration of a disabled individual’s quality of life. A special needs trust is carefully drafted to ensure that the funds it holds are used to give the disabled individual things that public benefits cannot give them. Public benefits pay for someone’s essential daily requirements, food, clothing, and shelter, for example. The special needs trust funds are used to pay for things that public benefits do not pay for. Perhaps the individual benefits from special therapies that Medical Assistance does not cover, the special needs trust can pay for that. Perhaps the individual would benefit from a specially modified wheelchair or vehicle that is not paid for by public funds, the special needs trust can pay for that. Perhaps the individual requires someone to come in and clean their apartment, the special needs trust could possibly pay for that. The ways in which a special needs trust can enhance a disabled individual’s quality of life are nearly innumerable.

The value of a special needs trust cannot be over stated. The funds they hold supplement not supplant public benefits, and ensure that the disabled individual has the highest quality of life possible for as long as possible.  If you anticipate your child or loved one receiving an inheritance or other gift, contact McMorrow Law at 724-940-0100 to discuss your estate planning options including a special needs trust.