Saturday, December 8, 2012
If a parent has a disabled child, that parent might want to consider creating a special needs trusts for their child. The primary reason that a parent might want to take this course of action is because of the expenses that a child is likely to incur from treatment for his or her disability. The costs of caring for a disabled child, even for wealthy families, can be burdensome and drain all of the assets that the family owns. It is important to note that many individuals who have disabilities require long-term care. For the vast majority of people, the costs of long-term care is paid by Medicaid or Social Security. That is why it is important to create a special needs trust. A person is only allowed to have about $2,000 in assets before they are disqualified from taking any of these benefits. The trust will allow a family to supplement the costs of caring for their disabled love one without disqualifying their disabled family member from Social Security or Medicaid. For the parents who are creating the trust, they might want to consider writing a letter to the trustee of the special needs trust. The letter should provide the considerations that the trustee needs to make when making decisions for their child.
The parents of the child can create a special needs trust at any time in that person's life. This might be the case if the disability is discovered later in life. A child with a disability might also be able to make a special needs trust should the person receive a windfall of some sort. The trust acts in much the way as if the parents of the child made the trust. The only difference is that the remainder of the trust gets paid to the government following the death of the child.
See Tatiana Serafin, Creating Special Trusts For Challenged Kids, Barron's Penta, Dec. 1, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.