Parents of children with disabilities, or children whose parents have become incapable of caring for themselves, may face the very difficult decision of making sure their loved ones are taken care of should they pass away before the loved one. Estate planning is important for anyone in Kansas City, but individuals in situations like this may want to look into a specific type of estate planning document: the special needs trust.
Passing assets on to a disabled individual can be tricky, since disabled individuals with merely $2,000 in available assets may find that they lose their eligibility for benefits from government programs such as Medicaid. However, funds in a special needs trust do not count towards such assets. A trustee is designated to manage the trust. Because they can be complex, it is advisable to have an attorney draft a special needs trust. It cannot, for example, contain wording that allows for funds to be transferred directly to the individual with special needs.
It is also important to take care when choosing a trustee. Trustees must serve the best interests of the individual with special needs, but they must also understand the rules regarding trust administration. Relatives, professionals such as an attorney or corporate trustees can all fill this role.
Special needs trusts are important, because they can help individuals afford things that aren’t paid for by government benefits. Some examples of things that can be paid for using a special needs trust are haircuts, trips to the dentist, eyeglasses, educational programs and trips to visit relatives. In the end, a special needs trust can be an important resource for those with special needs and their families.
Source: CNBC, “Special-needs trust is key part of some estate plans,” Anna Robaton, June 1, 2016