If you are the parent or guardian of a child with special needs, you’ve already experienced the various challenges of navigating the complex world of government benefits programs and federal and state regulations for persons with disabilities.
It is likely you have thought more than once, “I sure am glad I was here to help!” Fortunately, you are the most persistent advocate and best caregiver for your child. But, what happens when you’re gone? What will your child’s long-term care picture look like? How do you ensure your child can achieve maximum independence and live a full, happy and secure life?
If you’re like most parents or guardians, the prospect of pre-deceasing your child is overwhelming to contemplate and, all-too-often, planning for such an eventuality stays in the “someday” pile. Compounding a natural tendency to delay planning while dealing with the pressures of day-to-day life are the many unknowns and wondering where to start. Unfortunately, failing to plan in advance can result in your child being denied future access to vital programs, especially since many government programs that offer cash and medical assistance have strict financial eligibility requirements. Even well-meaning actions by yourself or family members to set aside funds for a child with disabilities could result in a denial or disruption of essential services.
There are many options for preserving the future financial and physical wellbeing of your child. It is essential that you take action now to ensure your child continues to receive essential care and services required to live and thrive after you are gone. One answer to this long-term planning issue is a third-party special (or supplemental) needs trust. Essentially, a third-party special needs trust is designed to hold assets (like an inheritance) that set aside by a family or friends for a a person with disabilities to preserve government benefits and supplemental care needs. A third-party special needs trust will protect and prevent the assets from being counted against the individual when determining eligibility for government benefits like Medicaid and Supplemental Security Income (SSI). For parents thinking of planning for a child with disabilities, whether the child is 16 or 40 years old, this type of special needs trust can be established and funded at any point, and will continue to help maximize the child’s life options long after the parents’ deaths. This type of planning can offer peace of mind for the entire family.
Not all trusts are created equal, however. Federal and state rules concerning government benefits are complex and extremely detailed, and any special needs trust must be able to successfully navigate a myriad of requirements to carry out your wishes and successfully provide for the child’s needs. As a legal instrument, a poorly drafted trust can be worse than no trust at all, especially if it contains language or provisions that are in conflict with the government benefits rules. A properly drafted trust also should be tailored to meet the specific financial and family situation involved. This requires thoughtful planning that includes both a clear understanding of the various benefits programs and objectives, as well as anticipating future care needs as the child ages.
There are different types of special needs trusts, both third-party trusts and self-settled trusts, and the rules relating to their creation and management differ. This article contains some basic information on how a third-party special needs trust fits into a family’s long term care and estate plan. A special needs trust is a highly specialized, technical financial and legal instrument but, when it is well structured, the trust sets aside the resources to supplement the future care for a child with disabilities. Fortunately, there is help. Seeking the assistance of a trusted special needs attorney who understands the complexity of government benefits and is dedicated to helping families in the disabilities community, like those attorneys who are members of the Special Needs Alliance, assures your trust will be structured correctly and continue to providing vital care, resources and protection for your child.