The Elder and Disability Law Firm, APC
The role of trusts in financial planning for special needs child
Parents of special needs children in California often turn to trusts to provide funds and security for their kids. Eligibility for government benefits often factors into these decisions because many people want to ensure that their children remain eligible for government programs. Frequently, trusts solve this problem because they can set aside money to help a special needs person while not inflating his or her income and assets.
A special needs trust states how its assets will supplement a person's existence while he or she collects government benefits. This way, an individual remains eligible for public support for housing and other basic needs. The trustee will grant funds to the person as needed for extra expenses like travel and entertainment. Parents may fund a trust as soon as they create it or at the time of their passing. Funding could come from estate assets or a life insurance policy.
In some situations, parents are unsure whether their children will qualify for or need government benefits. A trust could accommodate this uncertainty by authorizing the trustee to create a special needs trust if it becomes necessary for his or her child to apply for government benefits. A wealthy family with a special needs child might set up a trust to fund the person's living expenses without worrying about him or her qualifying for public assistance.
A person who needs to explore methods for supporting a special needs person could ask an attorney to research the possibilities. After evaluating an individual's financial situation, a lawyer could recommend trust strategies to promote the person's goals and draft the terms of the trust document. An attorney familiar with trusts and trust administration could help someone choose a trustee and prepare for the long-term management and distribution of his or her assets.