It worries you. How will your special needs child live once you and your spouse have died? For all these years, the two of you have taken care of your daughter’s needs. At times, the experience has worn you down physically, mentally and financially, but you love your child unconditionally.
You should address this question in your estate plan with the creation of a special needs trust. Within this trust, you hope to have decades of funding to pay for many living expenses such as medical costs, training and therapy for your child.
Lifespan of trust, amount and trustee
There are a few important things to know about special needs trusts, which have their complexities:
- The trust’s lifespan: A special needs trust may have to last as much as 40 years because your adult child may live that long. And, as a result, it should have an abundant amount of money in place.
- The amount: This trust may need to contain up to $1 million. The reasons being: Your child may live for a long period of time and those necessities – such as a specially designed van, wheelchair, electronics, computer and guardianship-related expenses – will prove costly. In this situation, it is a good idea to approach other family members who may be willing to contribute to the trust.
- Who is in charge?: A trustworthy, empathetic and financially savvy person is needed in the trustee role. This person will make the difficult decisions when needed and provide the payments for your child’s necessities. You want a great sense of comfort when naming a trustee.
Another important detail to know is that your child will still receive certain public benefits from outside of the trust. This includes food stamps from the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI) and Medicaid. This is where a trust has an advantage over a will. If your child inherited the money in a will, he or she would no longer qualify for these public benefits.
Accomplishing a family goal
A special needs trust requires careful planning and attention. It will help you accomplish your family’s goal to provide for your special needs child for years to come. Doing so will give your family a certain piece of mind.