Your child has grown into adulthood. You have loved them from Day One. But as you get older, you realize you may not be around to care for them for the rest of their lives. As a parent of a child with special needs, you have concerns as to how to do this and what will happen.
This marks the time to consider, prepare and research a special needs trust. As a financial and legal tool, a special needs trust provides the money that people with disabilities need. This trust also allows them to maintain their eligibility for critical government benefits.
May have to last 40 years
A special needs trust will provide for your child after you die. It pays for many things, including education, computers and medical expenses and equipment. In the initial stages, it is crucial to collaborate with trusted family members willing to contribute money to the trust as well as experienced professionals such as financial advisers and attorneys.
In working with others, you can determine how to fund the trust as well as appoint a trustee. Some professionals recommend a minimum of $100,000 in setting up the trust. But, in many cases, much more money – as much as $1 million — is necessary because a special needs trust may have to last up to 40 years.
You have two choices in creating a special needs trust. They are:
- Third-party trust: Created with assets provided by parents, grandparents and others in order to care for your disabled child.
- Self-settled trust: Created with assets belonging to the disabled person. The money may include personal injury settlements, inheritances and personal savings.
A special needs trust provides a solid financial resource for your disabled child. Because there are so many rules and complexities attached to them, it is a good idea to seek legal advice from an estate planning attorney.