Last month, we wrote a post about some of the types of trusts that you can utilize to bolster your estate plan. Having a trust is a great way to improve your estate plan, protect your estate from the probate process, and to ensure that your assets are properly handled and distributed to your beneficiaries and heirs when you pass away.
Some circumstances, though, require a family to utilize a special needs trust for their child. This type of trust can help when a family has a child that is disabled or is in need of medical assistance for most of their life. The special needs trust is important for many reasons, but one stands out.
A special needs child will likely receive government benefits so that he or she can get the help that he or she needs. Well, those benefits often come with strict requirements for how much income the individual receives. If the child in question receives a large amount of income from, say, an estate plan being executed, then they could be disqualified from the benefits that they need.
A special needs trust protects your child from this happened. The trustee in charge of the trust will ensure that the benefits are disseminated in an appropriate manner so that your child doesn't lose out on those government benefits.
As always, if you need help establishing a trust or if you have questions about a trust that you are linked to, then you should consult with an attorney.
Source: Wall Street Journal, "Estate Planning When You Have a Special-Needs Child," Henry E. Klosowski, March 27, 2016