What can I do to ensure my special needs child is taken care of after my death?

All parents understand that a special needs child will require lifelong care. That child may never be able to live alone without assistance. Often, parents worry about what will happen to their child when they can no longer take care of him, and they want to be especially proactive in planning for the future. One of the most important actions in these cases is to establish a special needs trust.

What Is a Special Needs Trust?

A special needs trust is an arrangement in which a third party manages assets for a beneficiary who is physically or mentally disabled. The trust fund is administered by a chosen trustee who is in charge of the money and spends it on the child’s behalf. There are two types of special needs trusts:

  • Individual. An individual trust is administered by a trustee selected by the parents or legal guardians of the child and supports only that child.
  • Pooled. A pooled trust is a collective or community trust that many families can contribute to. This trust is administered by a nonprofit organization, although each beneficiary does have an individual account and trustee appointed by the nonprofit. This is a common option when parents feel they do not have a good choice for an individual trustee or are leaving the child a modest sum of money.

Both types of trusts are set up by parents, grandparents, or legal guardians of the special needs child. Additionally, trustees for both types of trusts are legally bound to follow the terms of the trust document to benefit the child.

The Benefits of a Trust

Special needs trusts allow parents or other trustees to leave money to a child while still protecting the child’s eligibility for government assistance. Most government programs will disqualify candidates with assets worth more than a set limit. To receive supplemental security income or health benefits in Illinois, a person cannot have income greater than three times the poverty level or receive more than $2,000 per month. Often, when a child is left an inheritance or receives a legal settlement, these amounts of money are greater than the state-mandated income limit.

The money in a special needs trust is not managed by the child, so the assets are not counted by the government, ensuring it has no impact on the amount of services a child can receive from federal sources. Without the trust, the child could lose supplemental services and have to pay for everything out of pocket. Additionally, special needs trusts allow grandparents or other loved ones to gift the child money directly into the trust.

If you are the parent, grandparent, or caregiver of a special needs child, contact the experienced legal team at Tapella Law to help you protect his future. Call us today at 855-522-5291 for a free consultation.