In this article, you can discover:
- How a special needs trust can benefit children with special needs and their families.
- The distinction between a first-party and third-party special needs trust.
- The role of guardianship and regular review in managing a special needs trust.
What Should Parents Consider When Creating An Estate Plan For A Child With Special Needs?
For parents of a child with special needs, a Special Needs Trust is a valuable tool. It not only protects personal assets but also ensures the child receives full benefits from Medicaid while enhancing their quality of life through the trust’s funds.
How Does A Special Needs Trust Benefit Individuals With Special Needs And Their Families?
A Special Needs Trust secures the child’s or their parents’ assets, preserving their eligibility for Medicaid benefits. Additionally, funds from the trust can be used for expenses not covered by Medicaid, improving the child’s quality of life.
What Types Of Special Needs Trusts Are Available And How Do They Serve Different Purposes?
There are two types of Special Needs Trusts: first-party and third-party trusts. A first-party trust is typically used when a child receives a large settlement due to an incident causing their special needs. This trust helps preserve the funds without compromising Medicaid benefits. A third-party trust, however, does not have spending restrictions and is generally used to manage funds provided by someone other than the beneficiary.
How Does Guardianship Factor Into Special Needs Estate Planning, And How Should Families Choose A Guardian?
The guardian plays a crucial role in overseeing the money in the Special Needs Trust and deciding when and how to spend the funds for the child’s benefit. While there are spending restrictions on first-party trusts, there aren’t any for third-party trusts. Regardless, guardians should ensure that the funds are used wisely for the benefit of the person with special needs.
How Frequently Should A Special Needs Trust Be Reviewed And Updated?
A Special Needs Trust should be reviewed at least every two years to track expenditures and understand how the money is being used. It should also be reviewed when the child transitions into adulthood, as the child’s special needs might continue and the trust typically extends until their death.
Can Parents Plan For Their Special Needs Child’s Transition Into Adulthood As Part Of Their Estate Planning?
Absolutely. A Special Needs Trust extends into adulthood, considering that a child’s special needs may persist. Therefore, parents should incorporate this aspect into their planning and review the trust when the child reaches adulthood to ensure continued support.
What Resources And Professionals Are Available To Assist Families In Creating An Effective Estate Plan For A Special Needs Family Member?
Creating an effective estate plan for a special needs family member often requires the expertise of an experienced estate planning attorney. They ensure the Special Needs Trust is properly established, receives state approval, and is adequately funded. Families should also consider appointing an administrator or financial advisor to manage the investments of the trust conservatively, promoting steady growth to cater to the child’s needs.
For more information on Estate Planning For Special Needs Children, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.