Special Kids & Special Needs Trusts

Parents of special needs kids are often not worried about themselves, but they are deeply concerned with how their disabled child may be cared for and maintained when they, the parents themselves, are gone. Sometimes these parents or grandparents will have spent their entire adult lives caring for the needs of a child or disabled adult who has been totally dependent upon them. Elderly individuals may be faced with not only their own catastrophic disease or illness, but they need an estate planning vehicle for providing for their disabled child or loved one.

In these cases, a Special Needs Trust can help. Often the disabled child will already be a recipient of SSI benefits and Medicaid because the disabled child was unable to work for a living due to the disabling condition. The disability may be such that the child will need extensive and costly medical treatment forever. Maintaining eligibility for the Medicaid benefits to cover these medical costs is critical.

Funds available to the parent for care and welfare of the child may be modest, and they might only provide for payment of the medical expenses for a short time. A Supplemental Needs Trust can provide funds for things that the public benefit programs will not provide as well as preserving Medicaid eligibility so that the money is not consumed by expensive medical care. What? Yes, that’s right. A properly drawn Special Needs Trust allows for the lawful qualification for public benefit programs, preservation of assets, and the distribution of these special ‘goodies’ from the trust that would enhance the quality of the disabled child or adult’s life. These ‘goodies’ could include: education, recreation, counseling, medical attention beyond the simple necessities of life. Specifically, things like summer camp, airline tickets for travel, electronic video games, or a television are the little luxuries and comforts that public benefits do not provide.

Special Needs Trusts are set up to comply with all state and federal law. Commonly, they are run by a family member, a trustee (like a bank), or a nonprofit pooled trust. Great care is taken in the choice of appropriate trustees to manage all trust assets, to deal with future replacement appointments, and to comply with all reporting and tax requirements. The trustee’s goal is to make lawful disbursements from the trust that will improve the quality of the beneficiary’s life without disqualifying the beneficiary from SSI or Medicaid. For more information on Special Needs Trusts, see the websites for: the National Academy of Elder Law Attorneys at http://www.naela.org/ and the Academy of Special Needs Planners at http://www.specialneedsplanners.com/aboutus.asp