If you have a child or grandchild with special needs, it is extremely important to plan carefully for their future. For most families with a special needs child, having a Special Needs Trust in place is crucial. In a nutshell, a Special Needs Trust allows for supplemental money to be set aside for the child’s welfare without risking the loss of public benefits like Social Security and Medicaid.
The laws regarding the creation and administration of Special Needs Trusts are extremely complex, so please consult a professional attorney adept in this area of the law. Also, upon completion of a Special Needs Trust, you will need to ensure that anyone and everyone who might name the child as a beneficiary of a Will, Trust, Life Insurance, Bank or Investment Account knows to name the Special Needs Trust as the beneficiary and not the child directly. This is necessary to keep all the public benefits secure.
Furthermore, because of the complexity of the laws, it is important to regularly review the child’s situation with a specialized attorney every few years. There are clearly increased costs involved with the creation and management of a Special Needs Trust, but the losses that could be incurred can be devastating, both financially and in terms of your child’s care.
If you have a special needs child or know someone who has a special needs child, I encourage you to consult an attorney knowledgeable in the area. Additionally, you may want to check out the attached article from the National Law Review on this subject. Not only is their ample, more detailed information on Special Needs Trusts in the article, but there are additional links to more supplemental material.