Planning for the future of your children is important, but especially so if your child has special needs. You’re probably worried about their care after you’re no longer there. Starting to prepare early can give you more time to grapple with decisions about how best to set them up for a prosperous future. Often, a special needs trust can do just that.
What is a special needs trust?
A special needs trust is a kind of fiduciary arrangement created to care for those who need assistance taking care of themselves. A third party, the trustee, holds on to the money put into the trust. They are then responsible for distributing it to the beneficiary. This arrangement means that your child will have funds available periodically for different necessities or merely as spending money.
Benefits of a special needs trust
Government programs such as Supplemental Security Income and Medicaid require a monthly income below a certain level. A special needs trust can help your child remain eligible for them by doling out money in small amounts.
Another benefit of putting money in a trust for your child is that it makes it more difficult for an unscrupulous caretaker to take advantage of it. You hope that the person you entrust with the care of your child would only have altruistic intentions, but that is not always the case. Having a monitored trust makes it less likely someone could abuse access to the funds.
Finally, a special needs trust can also fund essential things like housing and care for your child. By carefully preparing a trust, you will be able to care for them long after you are physically with them.