A special needs trust means that you can have valuable peace of mind that your child will be taken care of after you’re gone. It’s not an easy thing to think about, we know, but it is vital.

We would like to reassure you that setting this up now is a proactive, positive step. It is undeniably an emotional task to undertake, but you may find that it actually eases your concerns about your child’s future.

Setting up a special needs trust is a wonderful way to look after the wellbeing and happiness of your child in the future. Don’t be like the 6 out of 10 Americans who lack a will or estate planning. Read on for how to set up a special needs trust that can support your loved one in the future.

What is a Special Needs Trust?

A special needs trust (or supplemental trust) is a specific type of estate planning. It gives your child with special needs adequate financial provision for the rest of their life. It is particularly important for children who claim government aid or may do so in the future.

The Supplemental Security Income (SSI) and access to Medicaid are needs-based support. If someone owns or has access to assets of $2000 or more, they would become ineligible to receive that support. So if your child were to inherit your property or money upon your death, he or she could lose eligibility.

If you set funds aside with a special needs trust, they can keep their needs-based government support. This means they can maintain access to healthcare via Medicaid — often a significant concern.

Plus they can use the trust money for any extras that they need. This might include:

• Dental or vision care,
• Equipment such as wheelchairs, computers, cellphones
• Additional care or therapies
• Vacations
• Furniture and furnishings
• Recreational and fun activities

The goal of the trust is to enhance the life of the beneficiary, so that will guide how they use the money.

However, they cannot use the trust money for housing or food because that would also make them ineligible for the government programs.

How To Set Up a Special Needs Trust?

Setting up a special needs trust can be a complicated matter, so it is worth seeking professional advice. Specific wording is required to comply with ever-changing government regulations in this area.

If written incorrectly, your provisions could make your child ineligible for other vital financial aid that he or she needs (or might need in the future). So it is important to have this done by a qualified and experienced attorney.

Choosing Your Trustee(s)

A vital part of the process of creating a special needs trust is deciding who should be a trustee. This is the person (or people) who will administer the trust on behalf of your child. It is not the same as someone being the guardian of your child; it relates solely to the administration of the trust.

They play a key role in terms of the financial decisions that affect your child. So you want to choose someone whose judgment you trust. Your trustee’s role is to spend money to enhance your child’s life, whilst also making the trust funds last as long as they can.

It’s important that the trustees keep up to date on SSI and Medicaid law changes, to maintain eligibility. They also need to maintain records and file taxes on behalf of the trust and may need to invest trust funds as well.

Whilst you probably want a family member or friend who your child knows to be a trustee, it’s also worth considering a co-trustee from your law firm. That way you can be confident that your child’s eligibility for government aid is maintained and all legal aspects are taken care of.

Helping the Trustee to Help Your Child

The trustee(s) will work with your child’s guardian in your absence to make the best decisions for your child. You can set up the trust to come into effect after you pass, or you can set it up to operate now. In that case, you would be the current trustee and would name your successor trustee(s) to manage it when you’re gone.

Often people write a letter on behalf of the beneficiary of the trust (your child) to help future trustees understand their needs and preferences. This is especially important if your child is unable to communicate this clearly themselves.

This letter would include their personal, educational and medical history, their living situation, social life, religious beliefs and any other factors that you want the trustee to know. Understanding these factors will help the trustee to make decisions in your child’s best interests.

Interesting Financial Aspects

The trustee cannot give money directly to your child from the trust, but they can purchase items on behalf of your child using trust funds. So if your child needs new hearing aids, the trustee can buy these for them using money from the trust.

Another interesting fact about special needs trusts that you may not know is that anyone can contribute. Trusts are usually set up by parents for children, but actually, other family members or friends can contribute. Indeed, anybody may contribute.

Anything Else I Need to Know?

There are many interesting aspects to this area of the law, making it imperative to get proper advice. For example, did you know that when your child turns 18, you lose the natural right to be their guardian?

That means you wouldn’t be able to make healthcare or life decisions on their behalf after they turn 18!

You can avoid this startling situation by getting guardianship in place via the probate court. A qualified attorney such as ourselves can help you with this – ideally at least 6 months before your child’s 18th birthday.

We would be delighted to speak with you about getting your child safely set up for the future with a special needs trust. Please contact us at (706) 724-0405 for a confidential discussion.

Alternatively, we have several excellent workshops available online that you might find helpful. We invite you to watch them here.