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SERVING SPRINGFIELD AND THE SURROUNDING COMMUNITIES IN SOUTHWEST MISSOURI FOR OVER 20 YEARS
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A plan for a special needs child is important for estate planning

On Behalf of | Jun 8, 2021 | Estate Planning |

Every child in Missouri has needs as they grow older and it is their parents’ responsibility to ensure that those needs are met. This can require a large amount of time and money to do, but some children will need extra care. Some children have special needs for physical or mental disabilities. These children may need additional medical care and additional supervision as well. Sometimes the disabilities will prohibit them from being able to find suitable employment later on in life as well.

While many children are able to eventually find a job when they become adults, allowing them to provide for themselves, people with special needs may never get to that point. This may mean the parents need to provide for them the rest of their lives. However, when they become adults they may qualify for governmental benefits for assistance with finances and/or health care costs. Most of these programs have asset and income limitations in order to qualify for the benefits though.

Benefits of a Special Needs Trust

Parents of children in this position may consider establishing a special needs trust for the child. These types of trusts allow for the parents to provide for the children without being concerned about the child losing their benefits due to exceeding the asset limitations.

A special needs trust allows assets to be put in trust for the benefit of the child without passing ownership of the assets to the child. A trustee manages the assets and provides for the child’s needs with the assets in the trust. This allows parents to give the child gifts or inheritances, name them as beneficiaries on retirement accounts or life insurance policies and past what they want them to receive when they pass without the risk of cutting off the benefits the child receives and relies on.

There are many different aspects that parents need to consider as they prepare their estate plan. Parents who have children with special needs have extra considerations they need to make though. One of those is to protect the children’s ability to receive the benefits they need while still passing their inheritance onto them. Special needs trusts are very technical trusts though and need to be drafted and funded properly to ensure the protect and provide for their children. Experienced attorneys understand the importance of these trusts and may be a useful resource.