Worry and concern often ripple within you whenever you think about the future of your special needs child. The likelihood that your child outlives you remains a strong possibility. Since his birth, you have loved him, cared for him, bathed him, taken him on wheelchair strolls through parks and given him the experiences that any parent wants to share with their child.
You also provided the financial means so he could remain in your family home, while paying for the necessary medical equipment and health care costs. But where is the money going to come from once you die? All the love and guidance in the world will not be enough to ensure your child maintains a lifestyle to which he is familiar. You need to set aside enough money. You need a special needs trust.
Understand how it works
Instead of an inheritance, a special needs trust is a more logical choice to provide financially for your child. Careful consideration and planning are necessary for creating a special needs trust. Here are some steps toward building its foundation and understanding how they work:
- Bring together trusted family members who would be willing to contribute money. There is the proverb of “It takes a village to raise a child,” and you need that village when creating a special needs trust.
- The bare minimum of such a trust is $100,000. Keep in mind that this money should last for as much as 40 years. When understanding that timeline, many consider contributing as much as $1 million into a special needs trust.
- Name a trusted person as trustee. He or she will oversee the special needs trust to pay for the things your child needs. For example, the money can pay for medical expenses and equipment, computers, education and an advocate who makes sure your child is not neglected.
- An inheritance can disqualify your child from crucial government benefits, including SNAP (food stamps), Medicaid and Supplemental Security income. A special needs trust avoids this scenario.
A special needs trust provides an essential financial foundation for your child. However, this estate planning tool can be complicated. Before you pursue one, discuss thoroughly with your family and contact a knowledgeable estate planning attorney.