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Planning for family members with special needs

On Behalf of | Jul 9, 2021 | Estate Planning |

Maybe a doctor recently diagnosed your child with autism. Perhaps you have become the caretaker for your sibling with Down Syndrome now that your parents have died. When someone you love has special needs, you will likely do everything in your power to take care of them.  

Trying to plan ahead for their future needs is as important as meeting their current ones. Whether you want to encourage independent living in the future or set a loved one with special needs up for a comfortable life after you die, a special needs trust (SNT) can play an important role in your planning. 

An SNT can make independent living more achievable 

Moving assets into a special needs trust can provide a stream of income for a loved one on a monthly basis or an emergency cushion in case they lose a job or otherwise encounter financial hardship. The trustee can approve withdrawals on a case-by-case basis or send a check for supplement support every month.  

Careful planning can limit how much they use in one month or one year, which can help ensure that they still qualify for state aid programs like Medicaid. You could possibly help your loved one with special needs move out into their own place or into a group home with the financial support of an SNT. 

An SNT can provide for your loved one long after you die 

Especially if you have only one child with special needs and no other heirs, the inheritance you leave them when you die could be problematic. It could stop your child from receiving state aid, leave with a lot of tax debt or make them a target for those who would engage in financial abuse by trying to get control of their assets.  

Naming a trustee ensures there is someone overseeing their financial decisions and care for your loved one with special needs after you die. Planning a trust carefully can ensure there are still resources for your child with special needs for the rest of their life because they can’t misuse those resources.  

You could fund an SNT with the payout from your life insurance policy or even the home that you live in that your child will continue to live at after you die. Thinking about your goals and the wishes of your loved one with special needs can make planning for their future easier.