California parents of children with special needs want to make sure their offspring are well taken care of throughout their lives. Parents facing this challenge know they won't live forever, and they worry about what will happen to their special needs dependents once they're gone.
Legal experts say that one of the most efficient strategies for ensuring special needs individuals continue to receive the care they need involves the creation of a special needs trust that designates the special needs child as its specific beneficiary. In order to qualify for government assistance, special needs individuals can't have significant assets. Leaving money directly to a special needs individual will almost certainly disqualify them from receiving state-funded services that can be of benefit.
A trust that's set up so that it's managed by a trustee, however, won't disqualify the special needs individual from receiving Medicaid, Supplemental Security Income or other types of public assistance. Funds disbursed from this trust can be used toward a range of useful products and services such as purchasing a handicapped-accessible motor vehicle or paying for recreational activities. The beneficiary's assets will also be protected should the beneficiary ever become a defendant in a civil lawsuit.
Significant financial planning must go into setting up the trust since it will need to provide financial support for the special needs individual over the entire course of his or her lifetime. Among the factors that trust planners will need to consider are the beneficiary's expected lifespan, his or her eligibility for government services and the specific medical attention that may be required. An attorney with experience in estate planning can be a useful resource for parents who want to find out more about these types of trusts.
Source: CNBC, "Special needs trusts: Helping parents provide for kids' futures", Jennifer Woods, May 31, 2014