Q:  My son has autism and is dependent on SSI.  I would like him to inherit my estate but do not want to jeopardize any government benefits he may be entitled to in the future. What can I do?

Parents of children with special needs are aware of the importance of needs-based government assistance programs and how necessary they are for their child’s immediate and long-term welfare.  A special needs trust, also known as a supplemental needs trust, can be utilized to provide financial security to our child after you die without leaving them ineligible for the government benefits they need to obtain care. This type of trust is a legal arrangement created to provide financial support and assistance for individuals with disabilities or special needs. The purpose of a special needs trust is to enable a person with special needs to receive monetary assistance without jeopardizing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI).

The trust is typically set up by a parent, grandparent, or guardian of the individual with special needs, and it can be funded with various assets such as cash, property, or life insurance proceeds. The trust is managed by a trustee, who is responsible for ensuring that the funds are used appropriately to enhance the quality of life for the beneficiary without affecting their eligibility for government benefits.

The funds in a special needs trust can be used to cover a wide range of expenses, including medical care, therapy, education, housing, transportation, and recreational activities. By having the assets in a trust, they are not considered as the beneficiary's personal assets, which allows them to maintain their eligibility for government benefits.

There are two main types of special needs trusts: first-party and third-party trusts. A first-party special needs trust is established with the assets belonging to the individual with special needs, such as an inheritance or a personal injury settlement. On the other hand, a third-party special needs trust is funded with assets owned by someone other than the beneficiary.

Creating a special needs trust requires careful consideration and legal guidance to ensure compliance with state and federal laws. It is essential to work with an attorney experienced in special needs planning to determine the appropriate type of trust and establish the necessary provisions to meet the unique needs of the individual with disabilities.  Please contact our office for further information.

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