If you have a child who has a disability or other special needs, you may have some well-founded fears about his or her ability to work as an adult. Luckily, if your child cannot work, he or she may be eligible for certain public benefits, such as Supplemental Security Income or even Medicaid.
As you probably know, means-tested benefit programs typically provide only meager benefits to those who qualify. While public benefits may cover the cost of housing, food and basic medical care, there is not likely to be much left over for investing in the things that make life worth living.
Special needs trusts
Fortunately, there is an estate planning tool that provides you with a workaround. With a special needs trust, you set aside funds for the benefit of your child without jeopardizing his or her ability to qualify for public benefits. According to the AARP, these trusts are often critical in improving the quality of life for those who receive public benefits.
Special needs trustees
When you form a special needs trust, you must find a trustee to oversee it. This is not a task you should take lightly, as the trustee must perform a variety of tasks. Among others, these usually include the following:
- Investing funds in the trust
- Keeping comprehensive records
- Filing applicable tax returns
- Approving disbursements from the trust
- Ensuring your child remains eligible for public benefits
Your special needs trustee also may be in a unique position to help your child find the social services and medical resources he or she needs to thrive. Ultimately, by picking the right person to be your trustee, you both cement your legacy and protect your child’s future.