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Estate planning for your special needs child

Every loving parent wants to ensure their child’s comfort, security and safety before they pass. Fortunately, estate planning provides a means through which you can continue to care for and love your kid after your passing.

What is a special needs trust?

A special needs trust (SNT) is an estate planning tool that enables the grantor to provide the beneficiary—in this case, the person with a disability—additional financial support. A trustee oversees the funds held in an SNT, which can pay for things beyond necessities, such as schooling, transportation, recreational activities and therapy.

In essence, a special needs trust allows beneficiaries to continue experiencing comforts and luxuries without disqualifying them from receiving support from Medicaid or Supplemental Security Income (SSI).

Is a special needs trust necessary if your child is eligible for public benefits?

SSI and Medicaid only cover essentials such as food, housing and medicine. The government may be unable to give your child the level of comfort you’d like them to have because of its limited resources.

As a parent, you probably want your child to have positive experiences, learn about and pursue their passions, and significantly enhance their quality of life. You can achieve this by establishing a special needs trust.

On the other hand, if money is not an issue and you prefer that your child not receive government benefits, you may establish a discretionary trust instead. Your child’s needs may evolve as they grow older. A discretionary trust will allow your trustee complete discretion over when and how much to distribute for your child’s benefit throughout their life.

As such, you want to ensure that the trustee you choose has your child’s best interests at heart. Providing specific instructions on the trust, for instance, can set limitations on what a trustee can and cannot do. An estate planning attorney can advise you on the best ways to set up one of these trusts to achieve your desired outcome.