It may not matter how old your child becomes. As a parent, you will probably always want to make sure your child has what he or she needs to lead a comfortable and fulfilling life. This may be especially true if your child has special needs.
Financial support may be an important way you look out for your child who has special needs. Even though your child is an adult, you may pay for him or her to take a certain class, go to the movies with friends or purchase a special treat. Sometimes, access to these little joys can greatly improve the quality of someone’s life.
However, the future is never certain. You may provide whatever assistance you can while you are alive, but to continue providing this assistance may require some careful planning.
The wrong estate plan could have unintended negative consequences
You may want to use a will or a trust to leave money for your child, but estate planning can be a little more complicated when you are planning for someone with special needs. There could be unintended negative consequences if your child inherits assets outright.
For example, the inherited assets could count against your child’s eligibility for certain government benefits and therefore disqualify him or her from receiving them. Some benefits that could be impacted, include Medicaid, Supplemental Security Income (SSI), In-Home Support Services (IHSS) or HUD housing assistance.
A special needs trust can offer the necessary protection
Fortunately, there is a way to leave money for your child without disqualifying your child from the benefits he or she relies on to meet basic needs. You could put your child’s inheritance in a special needs trust.
A special needs trust allows you to place assets in the trust. Once in the trust, a trustee of your choosing will manage the assets on behalf of your child. Because the assets are owned by the trust and managed by someone else, the assets will not be considered as “belonging” to your child and therefore will not count against your child’s eligibility for government benefits. This allows those benefits to cover expenses related to your child’s basic needs, freeing up the trust to provide for the little extras that can really help your child’s quality of life.
It can be important to realize that every family’s situation is different, and a special needs trust may be an invaluable estate planning tool to allow a parent to leave money to a child with special needs without disqualifying him or her from other sources of financial help.
If you have any other questions about this, please feel free to reach out to us (707-681-5373 or [email protected]) or to set up a complimentary estate planning consultation at your convenience by clicking on the following link: https://MyNapaLawyer.as.me/