Special Needs Trusts and Spendthrift Trusts
Parents of special needs, disabled or incapacitated children must focus on what their child’s life will be like when they pass on. When a disability is so severe that a child cannot be expected to be self-supporting, it’s important to develop a strategy for providing for their care. This involves their physical care, as well as their financial care, and qualifying for various health care and other benefits. There are various types of special needs trusts, also called supplemental needs trusts, that are considered for such situations. Sometimes the child is not incapacitated, but simply cannot manage their financial affairs, or potentially have health issues that prevent them from being able to handle money, in which case a Spendthrift Trust may be appropriate. We assist with options on what type of trust or other structure may be best for a child’s particular situation. A Special Needs Trust can be set up while you are alive, but often it is not funded with assets until your death. Once the trust is funded, the trustee needs to manage the assets properly, and most importantly, make sure distributions are made to cover the beneficiary’s needs without jeopardizing the beneficiary’s eligibility for government benefits. These types of trusts may also be beneficial in providing for elderly parents who have limited assets and are receiving government benefits for their care.