If you have a child who has a disability, you may worry about your ability to care for him or her during the final stages of your life. Fortunately, your son or daughter may be eligible for certain means-tested government benefits, like Medicaid, SNAP food benefits or Supplemental Security Income.
As you may suspect, giving money or other assets to your child may push him or her over the income threshold for public benefits. Including a special needs trust in your comprehensive estate plan may be the right solution for you and your child.
Retaining eligibility for financial help
Rather than transferring ownership of assets to your son or daughter, the special needs trust holds them for his or her benefit. Provided your son or daughter does not use disbursements from the trust for housing, utilities, food, basic medical care and other necessary expenses, he or she is likely to remain eligible for means-tested benefits.
Using disbursements from the trust
Shelter, food and medical care are essential needs for your child. While government programs often cover the cost of these, they typically do not pay for much else. Disbursements from the special needs trust may cover supplemental expenses that improve your child’s quality of life, including the following:
- Housing modifications
- Uncovered medical devices
- Travel, hobbies and entertainment
- Vocational training
- Electronic equipment
- Other supplemental items
Setting up a special needs trust may also give you peace of mind. After all, when you form the trust, you name a trustee to oversee it. Because this person is likely to have familiarity with the means-tested benefits your son or daughter receives, the trustee can prevent disbursements from the trust from accidentally rendering your child ineligible for government help.