Could it hurt to include your special needs child in your will?

If you have a special needs child, you know you may be a forever parent to that child who may never be able to support themselves and live on their own. You love your child and plan to care for them as long as possible. Still, you recognize that it is likely that your child will outlive you. How will you provide for your child’s needs once you are no longer around?

You may think it is best to leave your special needs child a big inheritance in your will. Instead, you may want to consider executing a special needs trust.

Why choose a special needs trust?

A special needs trust is an estate planning document. You place money in the trust to be used for specific purposes regarding your special needs child’s financial requirements. A trustee manages and distributes the assets, so your special needs child’s financial requirements are met.

The assets are owned by the trust, not by your child and not by you. Special needs trusts can be revocable or irrevocable.

A special needs trust serves many purposes. Perhaps most importantly, it can preserve your child’s eligibility for government benefits such as Medicaid and Supplemental Security Income.

Why not just include your special needs child in your will?

You may wonder why not just leave an inheritance to your special needs child in your will? Generally, this will not work out the way you would like it to.

If a special needs adult has more than a very limited amount of assets, they will not qualify for Medicaid, SSI and other benefits that the government provides to disabled individuals.

Leaving a large inheritance to your special needs child in your will could push them beyond the financial threshold for government benefits once you pass away. This could result in the denial or loss of much-needed government assistance.

This problem can be avoided if you leave your child funds in a special needs trust. This is because the funds in a special needs trust are not owned or managed by the special needs child. They are owned by the trust and managed by a trustee. Thus, they will not be counted when it comes to eligibility for government benefits.

So, if you have a special needs child, it may be worthwhile to look into executing a special needs trust. Trusts are complicated legal instruments, and a poorly drafted trust can be ineffective or even unenforceable. You will want the matter handled by a professional who is experienced in estate planning.