Special Needs Planning
SPECIAL NEEDS PLANNING FOR THE SPECIAL PEOPLE IN YOUR LIFE
Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.
Beneficial Trusts
It would be nice to have a stat here about special needs planning and relate it to your business.
There are several types of trusts to assist with these special planning challenges. The most common types are
Support Trusts and Special Needs Trusts. Learn more about these Trusts below.
Don’t judge each day by the harvest you reap but by the seeds you plant – Robert Louis Stevenson
FACT
Nearly 54 Million Americans cope with special needs and the rising associated expenses.
Source: National Organization on Disability
Special Needs Trusts
For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits.
There are two types of Special Needs Trusts:
Third-Party Special Needs Trust: Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.
Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.
Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.
Support Trusts
Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.