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Less-common benefits of a special needs trust

On Behalf of | Feb 20, 2020 | Estate Planning |

As a parent, you want to provide for your children. Of course, if your child has special needs, you likely face some challenges that other parents easily avoid. To be certain that your child has the financial support he or she needs to have a happy and healthy life, you may want to consider setting up a special needs trust. This is true whether your child is eligible for government assistance or not. 

Special needs trusts supplement the benefits that an individual receives from government programs, such as Supplemental Security Income or Medicaid. These trusts involve three key players: the donor, the trustee and the beneficiary. While special needs trusts are common for beneficiaries currently eligible for government benefits, there are a couple of other reasons that establishing a trust may be a good idea. 

A possible need for future benefits 

Even though your child may not currently rely on government benefits, he or she may need them in the future. If you do not do some contingency planning, though, your son or daughter may have too many assets to qualify for necessary assistance. As such, establishing a special needs trust now may be an effective way to preserve your child’s future eligibility for SSI, Medicaid or other needs-based benefits. 

A plan for safeguarding funds 

Sometimes, individuals with special needs have difficulty managing finances. A special needs trust has a trustee who invests and spends funds appropriately. Furthermore, even if your son or daughter is good with money, he or she may eventually live somewhere where money is an easy theft target. Either way, a special needs trust may be an effective plan for safeguarding funds. 

Clearly, the most popular reason to establish a special needs trust is to preserve an individual’s current eligibility for government benefits. Still, there are other reasons why you may want to set one up. By understanding all benefits of this type of estate planning, you can better provide for your son’s or daughter’s long-term welfare.