As the parent of a Virginia child who has special needs, you may need to make extra efforts to protect your child and make sure he or she is able to get by once you die. You may also count on government programs, such as Supplemental Security Income or Medicaid, to help support your child once you are no longer around to do so yourself.
Per the Special Needs Alliance, you need to be careful when leaving assets behind for a child with a disability. Leaving too much in a traditional will or estate plan may make your child ineligible for government assistance.
The government requires anyone who wants to use certain public assistance programs to undergo means-testing to determine the level of need. If you leave your child’s assets in a will, there is the potential for those assets to put him or her over the threshold needed to qualify for public benefits.
Understanding the special needs trust
When you place in a special needs trust, you are protecting them against means-testing. The assets you place inside the trust do not count as your child’s, so they do not come into play during testing. In other words, special needs trusts give you a chance to leave a considerable sum behind for your child without making him or her ineligible for other much-needed forms of assistance.
Special needs trusts come in two main types, and there are important differences between them. These differences include how you go about funding them and what you do with any remaining assets inside once the beneficiary dies.