SPECIAL NEEDS TRUSTS

 PLANNING FOR TOMORROW

Parent of special needs children are often unaware that there are financial planning techniques for creating cash assets for a special needs child, even if the parents are of modest means with minimal assets.

Accordingly, parents of children with severe disabilities must consider additional measures when making their estate plans. Government programs, such as Social Security Insurance and Medi-Cal are important financial and survival resources for individuals with disabilities.  Preserving eligibility for these benefits on behalf of a disabled children is essential. Many adult disabled children can qualify for public benefits programs (e.g., medical and supplemental income), even if life insurance or other asset creating tools create cash for the disabled child..  However, without proper planning, the adult disabled child may not quality for these programs. And…that is where a special needs trust fits in.

On behalf of a severely disabled adult child a special needs trust can provide for the following:

• Lifetime money management
• Continued eligibility for public benefits (e.g., Social Security Insurance and Medi-Cal)
• Providing a pool of private funds to compliment public benefits (using assets funded within a special needs trust as a means to provide services to the disabled adult as well as purchasing life’s conveniences)

A key objective of a special trust is to ensure that any assets or cash that passes to a special needs’ child at the time of a parent(s) death is not considered an “available asset,” as defined by public benefit agencies. A properly drafted Special Needs Trust, will allow a disabled child to receive public assistance; assistance that would otherwise be unavailable to the child;

A special needs trust can be funded in several way including but not limited to:

• Gifts from family, friends, relatives
• Personal injury settlements
• Proceeds of a life insurance policy
• Funds or other assets from an inheritance

Often a special needs financial planner will advise that at least $1 million to $2 million be set aside for a disabled adult child.  For most individuals that is simply not possible.  However, most families of ordinary means find the ability to make available a substantial amount of cash for their disabled adult child through the use of special life insurance policies. A financial planner who specializes in special needs trust planning can help you find the most affordable means to finance your special child’s future.

If you have any questions regarding special needs trusts, we can provide further information and provide you with a list of trust and planning professionals.

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Call us for a free consultation

(562) 699-2412