The Benefit of a Special Needs Trust (aka Supplementary Needs Trust)
Once you have a special needs child, you become aware of a vast array of applicable laws and regulations almost by osmosis. From medical appointments, to specialists, to therapies, to educational plan meetings, parents of special needs children are constantly attending to distinct circumstances. What many special needs parents may not know, however, is the absolute necessity of setting up a water tight Estate Plan.
Estate planning is key because in order to qualify for the Social Security Administration's Supplemental Security Income Benefits, ("SSI"), a disabled adult can't hold more than $2,000 in assets (excluding a car and a home). This means that if you die intestate, or without a will, your child will likely inherit more than the $2,000 limit, thus rendering them ineligible for these benefits. In 1993, Congress explicitly created an exception for the use of Supplemental Needs Trusts for disabled adult individuals, and treats these trusts as non-countable assets.
Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services. Medicaid eligibility may also make a disabled person eligible for many local community services. As a general matter, SSI benefits must be spent on food, clothing, and shelter expenses.
Additionally, by setting up a trust you not only ensuring that your child will be taken provided for beyond these programs, but you can also rest assured that your child will have a structured manner of receiving such support.
Why a Special Needs Trust Makes Sense
The benefits of having a trust for your special needs child are many. In particular, if you leave a close friend or relative as a beneficiary to your trust, the money might:
- Be subject to legal judgments or divorce settlements against the relative, or be lost in bankruptcy
- As the beneficiary, the relative can't be legally forced to use the money to benefit the disabled person
- Be taxed at a higher rate than the disabled child or a trust
- If the relative or friend dies prior the disabled child, the money could potentially go to his or her heirs
By meeting with an experienced Estate Planning Attorney, you can construct a trust with explicit instructions to take care of your special needs child. You have too much vested to leave your special needs child's financial future up to chance.
You May Also Like...
Bankruptcy – Business
Bankruptcy – Personal
Criminal Law – Appellate
Criminal Law – Federal
Criminal Law – State Felony & Misdemeanor
Drunk Driving Defense
Dumb or Weird Laws
GM Ignition Switch
Stryker Hip Replacement
Intellectual Property Law
Labor & Employment Law
Landlord Tenant Law
Personal Injury – Defendant
Personal Injury – Plaintiff
Social Security Disability
Weird Law Friday
Trending Searches#TBT #ThrowbackThursday constitutional law Criminal Law - State Felony & Misdemeanor dangerous or defective products divorce DUI dumb laws estate planning Events that Changed History Family Law FAQ first-amendment product-recall products liability random laws recall safety recall strange laws weird laws