As you get older, you may wonder what your grandchildren will grow up to be and what your children will do when you are no longer with them. This thought process can be even more difficult if you have a loved one with special needs in your family.
Obviously, you want to make sure they will be financially stable and have nothing to worry about. Setting up a special needs trust might be worth looking into if you find yourself in this situation. A special needs trust can also protect your loved one from any financial abuse and ensure the funds are appropriately spent.
What is a special needs trust?
A special needs trust allows parents and family members to contribute funds for the benefit of the disabled person and allow them to continue receiving their public benefits. When creating a special needs trust, you will need to choose a trustee. This person oversees the use of the funds in the trust and spends the money on behalf of the disabled person.
Because the money is not in control of the disabled person, they are still able to receive income-based benefits such as Supplemental Security Income and Medicaid. Government programs will ignore the money in the trust for eligibility requirements.
How can you use the funds?
Special needs trusts can be used to maintain and enhance the lifestyle of the disabled person. The trust funds cannot usually be used for food, housing or other things generally provided by government-run programs, but can be used for almost anything else. For intance, the funds could be used for the following:
- Medical care not provided by Medicaid
- Personal care attendants
- Internet and phone services
- Caring for pets
If you have any other questions about setting up a special needs trust you may want to contact an experienced estate planning lawyer. They will be able to help draft the documents needed and provide guidance along the way.