If you have special needs children, estate planning is of the utmost importance. There are different options that you can use in order to plan for the needs of your children while still ensuring that they have access to the government benefits that can help them live better lives as adults. One choice would be to create a living trust for the children. Keep in mind that if you contribute more than $2000 to the living trust, your child runs the risk of losing his Supplemental Social Security benefits, Medicaid, and even SNAP benefits. You should also consider the challenges your child currently has when establishing the trust. Children who may not be able to do certain things independently might require a different form of care from someone who can still function normally despite the disability. Here is additional information on estate planning for special needs families.
Choosing A Trustee
If you're creating a trust for special needs children, you'll have to designate a trustworthy and reliable person to manage it should you pass away before your child. This person can be your spouse, older adult siblings, your parents, or a non-profit organization that specializes in assisting special needs children. It's also wise to meet with those who you are thinking about giving this responsibility to as well as an experienced estate planning lawyer before making the decision.
Why Special Needs Trusts Are Important
The main reason you should consider a special needs trust is because you want to ensure that your assets will be used to provide what your children need upon your death. Sometimes government benefits are not always adequate for your children depending on their current health situation and future needs. At the same time, this trust can assist in helping the child keep his public benefits. You'll also protect the beneficiaries from any obligations you may have from a divorce or creditors. This is especially important in cases when your child may not qualify for certain government benefits.
Don't Forget Life Insurance
While you set up and fund the special needs trust, don't forget about purchasing life insurance for your child. Most families purchase term life insurance but if you're a special needs family, it might be best to get whole life insurance. This is because whole life insurance is permanent and it lasts as long as you pay the monthly premiums. However, you'll need to name a custodian if your child is a minor until he reaches adulthood should you pass away before he does.
In conclusion, establishing a special needs trust and obtaining life insurance puts your kids in the best place financially to care for themselves after you pass away.
If you need assistance with establishing a living trust as a special needs family, contact us. We're here to offer compassionate counsel so that you can provide the best quality of life for your dependents.