Special Needs Trust – Providing for a loved one with special needs

A Special Needs Trust is a great way to leave money for a disabled grandchild’s care without unintentionally causing benefit ineligibility. We often hear from grandparents who want to leave an inheritance to a grandchild with special needs when they are gone. They want the peace of mind knowing that there will be money set aside to help offset expenses that the family may incur. Things such as hiring home health aides, making home and vehicle modifications, and other disability-related expenses. 

The good news is that there is a way for grandparents to accomplish their goal of providing for their loved one with special needs, without unintentionally causing benefit ineligibility. That’s done by creating a Third-Party Special Needs Trust. The Trust can be set up in such a way that the grandparents can start putting money or assets into it during their lifetime, or they can name the Special Needs Trust as the beneficiary of their estate when they pass away. 

How is a Special Needs Trust better than leaving and inheritance?

Leaving an inheritance outright to a person with special needs often causes more harm than good. If the person is receiving public benefits such as Supplemental Security Income (SSI), Medi-Cal, or section-8 housing, receiving an inheritance (even a modest one) could cause ineligibility. We’ve been asked before by well-meaning grandparents whether ineligibility matters if there is enough money left behind for the child’s care. That is a tricky question to answer because benefits for individuals with special needs cover much more than money.  For example, if the child is found ineligible for Medi-Cal, there’s a chance that he or she may not be able to find or afford quality health insurance coverage elsewhere. Medical expenses are generally high for people with disabilities, and losing access to Medi-Cal could create ripple effects that go far beyond dollar amounts. 

In either scenario, money or property that is placed in the Special Needs Trust will not cause the child to lose benefits as the assets are owned by the Trust and are not owned by the child. The Grandparents family will also have the ability to appoint a successor trustee of their choosing who will be responsible for ensuring that the funds are managed wisely and that resources are used according to their wishes going forward. If you are a grandparent who is interested in leaving a portion of your estate to a grandchild with special needs when you are gone, we invite you to contact us at (800) 244-8814 to set up an appointment to discuss your options.

If you have any further questions about Special Needs Trust and strategies to shield your wealth, or if you’d like to have your current Special Needs Trust plan reviewed to make sure it still meets your needs, please contact us at our California  office at 800-244-8814 to set up a consultation.