You have worries. Those concerns have centered on your special needs child who has relied on you and your spouse to care for her since the day she was born. Who will maintain those financial and everyday responsibilities once you and your spouse are gone? How can you provide for her after you have died?
A special needs trust represents a potential solution if it contains a significant amount of money. Why? Because the trust may have to last 40 years or longer – as long as your child remains alive. During those years, a special needs trust may pay for medical-related costs, specific equipment such as a specially designed van or wheelchair, physical therapy, education, training as well as guardian expenses.
Plan, fund and select the right trustee
A special needs trust promises to be complex. However, it represents an effective tool regarding estate planning. When considering creating a special needs trust, there are many issues to address. Here are some important points:
- Understand that it will likely take the generous contributions of others. You and your spouse may have a difficult time trying to be the only contributors to the trust, thus falling far short of what your child needs. Contact reliable, loving and generous family members. They may help with seed money.
- The amount in a trust fund varies but families need a minimum of $100,000. But financial experts consider that number low. Because your child may live a few more decades, her special needs trust may have to be as much as $1 million.
- Selecting the right person as trustee is a crucial decision. This person administers the trust, paying for whatever she needs. Understand that the trustee must be dependable, financially savvy, trustworthy and prepared to make important decisions.
- With a special needs trust, your child will continue to receive public benefits such as food stamps, Medicaid and Social Security Income. Remember, though, money from an inheritance disqualifies him or her from these important benefits.
A sense of relief and accomplishment often arrive simultaneously once you create and fund a special needs trust. You understand that your special needs child will be provided for well into adulthood and well after your death. Carefully consider this option, talk with trusted family members and friends. It is also a good move to consult with an estate planning attorney.