Special Needs Planning
A Summary of Special Needs Estate Planning:
The reason for a Special Needs Estate Planning is to arrange for for the necessities of precious ones with disabilities when we are no longer there to bring together and advocate for them. Parents of children with special needs must make cautious estate planning choices to coordinate all of the legal, financial, and special care necessities of their children- both now and in the future.
Special Needs Trusts may be a critical component of your estate planning if you have loved ones with physical or mental disabilities that you hope to provide for after your death. In general, Special Needs Trusts are stand-alone trusts funded with separate assets (sort of like life insurance) or they can be sub-trusts in existing living trusts.
There are several types of trusts to help with these special planning trials. One of the most common types are:
Special Needs Trusts:
For many parents, a Special Needs Trust is the most effective way to support their child with a disability. A Special Needs Trust brings about assets while also preserving the child’s eligibility for public assistance.
Here are two categories of Special Needs Trusts:
Third-Party Special Needs Trust:
Formed by using the belongings of the parent(s) as part of an estate plan; distributed by the parent’s Will or Living Trust.
Self-Settled Special Needs Trust:
Usually generated by a parent, legal guardian, or grandparent using the child’s belongings to supply the Trust (e.g., when a child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets stay in the Trust after the child’s death, a “payback” to the state is mandatory, but only to the level of public assistance benefits that the child receives.