Parents of children with special needs often wait until their child turns 18 to consider creating a Special Needs Trust. Sometimes they wait even longer until the time when the child requires government benefits like Medicaid or Supplemental Security Income (SSI). However, Special Needs Trusts can do a lot more than just protect the disabled child’s access to government benefits. Here are a few of them:
The best reason for creating a Special Needs Trust before your child turns 18 is the same reason that parents of children without special needs should have an estate plan – to ensure the stability and security of their family members if something unexpected happens to them. Creating a special needs trust before a child needs it ensures that the trust will be there when and if is needed. If a parent of a child with disabilities dies unexpectedly and a Special Needs Trust is already established, their estates will be held for the benefit of the child in a way that offers maximum flexibility for the child.
Parents may decide to establish a Special Needs Trust for their minor child so that the grandparents and other relatives can fund it with gifts. Also, older relatives who are planning on leaving an inheritance for the child with special needs can bequest the funds directly to the trust. Having a Special Needs Trust guarantees that if the child needs government benefits in the future, they will not have large amounts of money in their name that could negatively impact his or her eligibility.
One way that parents can ensure that their child will have money for their care is to purchase a life insurance policy where the payout goes into the child’s Special Needs Trust. The earlier the parents start funding the life insurance policy, the bigger the financial benefit for their child with special needs. This funding can start well before a child turns 18 so it makes sense to create a Special Needs Trust to hold the proceeds even if the child is not yet receiving government benefits.
Care management plan
Special Needs Trusts can provide care management plans, as well as a structure for family involvement in the daily life of the person with special needs. In addition, professional special needs trustees can serve as resources for families that are looking for additional care options for their child.
Creating your child’s Special Needs Trust and keeping it updated can make it very effective for reasons that go way beyond preserving government benefits. Even if the trust is unfunded during the parent’s lives, having it can create a solid, stable foundation for the child if it is needed. If you have not yet created a Special Needs Trust for your child, call our Fairfax Virginia law firm at (571) 328-5795 to set up an appointment with Attorney Sheri Abrams today.