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What to know about special needs trusts

On Behalf of | Sep 26, 2019 | Trusts |

Parents of special needs children in Georgia and throughout the country face a variety of obstacles raising their sons and daughters. One of the challenges that they face is ensuring that there is enough money or other resources to provide the care that they need. It is not uncommon for special needs individuals to rely on Medicaid or other government programs to provide some of those resources. However, there are income or asset restrictions that participants in those programs need to abide by.

Generally speaking, assets inside of a trust are counted as resources. This is true unless a participant is the beneficiary of a carefully crafted special needs trust. To qualify, it must be an irrevocable trust with only a single lifetime beneficiary. It is important that anyone who wants to contribute to the trust understand how to do so properly.

If a friend, family member or anyone else gives a gift to the special needs individual directly, it could count as a resource. Parents are also encouraged to name their children as beneficiaries of life insurance or retirement plan benefits to help meet their needs. Finally, there may be charitable or other programs that can assist individuals in obtaining food, clothing or shelter without potentially losing assets or access to government benefits.

The estate planning process can focus on what individuals may need while alive as well as after they pass on. Parents of special needs children may want to create trusts that hold assets without having to count as income or resources for those children. A will or trust might also allow a parent to name a guardian for a child or provide instructions for how a child should be cared for. An attorney may help an individual create an estate plan.

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