As the parent of a child with special needs, you understand the joy these children can bring to a family and the everyone around them. You may also worry about your child’s future in general and especially about that future if something happens to you. The good news is that many children with special needs live independent lives as adults; however, as a parent you may still want to ensure your child has your financial support even after you are gone. A Huntersville special needs planning attorney at Potter Law Firm explains why providing for your child requires incorporating special needs planning into your estate plan.
Why Is Special Needs Planning Necessary?
If your child has special needs, the odds are good that he/she will continue to require specialized care as an adult and that care will continue to be expensive. With therapists, surgeries, specialized equipment, and caregivers, the costs associated with a child who has special needs can be daunting. Although your legal obligation to support your child may end when he/she reaches the age of majority, your desire to contribute to your child’s care and maintenance will likely continue. You should take care, however, in the way you provide that financial assistance, or you could jeopardize other assistance your child receives from programs such as SSI, Food Stamps, or Medicaid. Many assistance programs have both an income and an asset test that applicants/recipients must pass to gain or maintain eligibility. Consequently, an applicant/recipient could lose benefits by earning significant income or owning valuable assets. Gifting anything directly to your child, either during your lifetime or in your Will, could cause your child to lose eligibility for much needed assistance programs. This is why it is crucial that you incorporate special needs planning into your comprehensive estate plan.
How Is a Special Needs Trust Used?
A Special Needs Trust, also referred to as a “Supplemental” Needs Trust or shortened to “SNT”, is an irrevocable living trust that allows you to make gifts to your child without jeopardizing his/her eligibility for assistance. For a trust to be recognized as a special needs trust by SSI, Medicaid, or other assistance programs, very specific language must be used and the trust must be drafted properly, which is one of the many reasons to work closely with an experienced special needs planning lawyer when you create your trust. Once created, you can transfer assets into the trust to supplement the care provided to your child by programs such as SSI and Medicaid. Funds held in the SNT can be used to purchase extras such as a vehicle, a vacation, or furniture that is not provided by any of the government assistance programs. A properly drafted SNT can provide for your child both during your lifetime and after you are gone. In addition, other family members can contribute to the trust as well, increasing the assets available for your child’s care and maintenance.
Contact a Huntersville Special Needs Planning Attorney
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about incorporating special needs planning into your estate plan, contact an experienced Huntersville special needs planning attorney at the Potter Law Firm by calling 704-944-3245 (for Charlotte or Huntersville, NC), or you can reach our Ashland, Kentucky office at 606-324-5516 to schedule your appointment.