Can a special needs trust help my disabled child?

Parents of children with special needs know that their child’s need for care will last long after their child becomes an adult. They may want their special needs child to utilize government benefits such as Medicaid once they are grown. However, these benefits are income-based. For this reason, it is necessary to make special arrangements to ensure their special needs child is supported as an adult.

Special needs trusts

A trust is an estate planning instrument that allows a person to place assets into the trust, which are then used for the benefit of a named beneficiary. A special needs trust allows a disabled adult child to receive income without having that income count towards their eligibility for government benefits such as Supplemental Security Income or Medicaid. There is a designated trustee who controls the trust and oversee its management. Assets originally belonging to the disabled adult may need to be repaid, but assets placed in the trust by a third party are not. Special needs trusts are irrevocable.

What does a special needs trust cover?

A special needs trust covers a certain percent of the disabled adult’s financial needs not covered by government benefits. These benefits cannot be used for food or shelter. Generally, these funds are for medical care, caretaker expenses, transportation expenses and more. When parents put money in a special needs trust, the trustee must ensure the funds will be spent for their intended purpose. Special needs trusts must be established before the disabled adult beneficiary reaches age 65.

Special needs trusts are complex

Special needs trusts are complex legal instruments. It is important that parents considering a special needs trust for their disabled adult child understand all their options so they can make informed decisions.