Trusts are a way for people to manage their resources, control their legacies and provide for their family members. Particularly when adults have vulnerable people in their inner circles, they might decide to put together a trust.
Trusts can give someone access to resources without necessarily giving them control over those assets. Trusts can be very useful tools for those trying to meet the needs of a loved one in a difficult situation. If someone has a family member with a debilitating medical condition, a special needs trust could provide them with financial resources in the future.
Unlike giving someone with special needs a large amount of capital, a special needs trust can help to ensure that they still qualify for certain types of state aid. When might a parent or other family member need to consider creating a special needs trust?
When planning for retirement
Sometimes, the idea of establishing a special needs trust strikes someone preparing for their own retirement or seeking to establish paperwork for their final legacy. Someone preparing an estate plan may recognize that they cannot leave a direct inheritance to a particular family member. It may be at that point that they decide to draft a special needs trust as a means of providing resources to a loved one who cannot manage an inheritance or who could lose key resources if they inherited property directly.
After a diagnosis
Someone doesn’t need to worry about their own mortality to recognize that a special needs trust might be necessary. An individual in the prime of their life with years of active earning ahead of them could also see the value in establishing a special needs trust for a family member. No one ever knows when their health might decline or they could experience an emergency. Someone’s vulnerable child or other loved one could be left without resources if they die unexpectedly or could end up in a difficult situation because inherited resources eliminate their eligibility for certain benefits.
Many parents decide to create and begin funding a special needs trust after medical professionals diagnose one of their children with a debilitating and permanent medical condition. It is better to establish a trust and other protective legal documents ahead of time before someone needs them as opposed to delaying the process and potentially not having that protection in an emergency. Even if someone does not currently have the assets to fully fund a trust, there are other ways to manage that process, including life insurance.
Recognizing the need for a special needs trust is often the first step toward protecting someone who is too vulnerable to live independently.