The Attorneys Of Stewart Sorice Farrell Finoli And Cavanaugh LLC

Special needs trust can protect your child

On Behalf of | Sep 26, 2018 | Estate Planning |

For some, estate planning is as simple as writing a will and dividing their assets equally among their children. However, you may have a more complicated situation that requires more careful consideration and planning. Distributing assets to some of your heirs may result in devastating consequences.

If you have a child with special needs, you know that child will likely depend on government assistance, such as Social Security Disability or Medicaid, for the rest of his or her life. These programs have strict rules, including limits on the amount of income or assets the participants may have. Leaving an inheritance of any size to someone receiving federal or state aid may jeopardize eligibility for those critical funds. You may wish to consider adding a trust to your estate plan.

Why is a trust important?

Government programs limit a receiver to $2,000 in assets. Your bequest to your child could easily result in ineligibility. With a special needs trust, you can leave money for your child without disqualifying him or her from the government benefits currently coming in. The trust is legally the owner of the assets, and you assign a trustee to manage the trust, invest the funds as needed, and distribute them to your child in accordance with your instructions and the restrictions of the government programs.

The choice of trustee is important since that person will carry the responsibility for the success of the trust as well as reporting to the government about the disbursal of the trust’s funds. Your trustee may work with your child’s advocates to ensure the funds from the trust are helping your child maintain a positive quality of life. Your careful instructions included in the trust documents can also assist the trustee in this.

Reach out for guidance

Establishing a trust for your child with special needs can help improve or maintain the quality of your child’s life after you are no longer able to provide for him or her. It is critical that one meticulously drafts and carefully funds the trust. There are many contingencies to consider and Pennsylvania laws to comply with, and you may have many questions as you create your trust. For these reasons, the assistance of an experienced legal advocate can be of great benefit to you.

Seeking the guidance of an attorney as you begin your estate planning can help you to avoid making mistakes that may jeopardize the funding your child requires for receiving proper care and living a normal standard of life.