If you have a child or other loved one with special needs, your long-term planning should account for that. A special needs trust allows families to provide for a disabled loved one’s future well-being while maintaining their eligibility for needs-based government benefits.
The special needs trust offers several advantages.
1. Maintain valuable benefits
Properly structuring the trust keeps those funds out of resource-limit consideration. That means that the beneficiary of a special needs trust can receive disbursements from the trust to cover expenses related to their disability without losing their eligibility for programs such as Medicaid or Supplemental Security Income.
2. Pay for necessities
Trust funds supplement any gaps in government assistance, funding important disability-related costs to enhance quality of life. This may include medical equipment, therapies, education, transportation, housing modifications, recreation and more based on the individual’s needs.
3. Provide flexible support
A trustee manages the assets and makes disbursements on the beneficiary’s behalf. This arrangement allows for flexibility when needed rather than providing a lump sum. The trustee can pay for emergencies and respond to changing requirements over the disabled individual’s lifetime.
4. Offer customized care
You can tailor the trust to the specific needs of your beneficiary. The trustee exercises discretion over the fund according to its guidelines. This allows your beneficiary to get the customized care that meets their needs.
Approximately 19% of the population has some form of disability. When your loved one has a disability, knowing that resources are available to cover expenses beyond basic living costs can provide you with peace of mind. You can rest assured that your loved one has the financial support that they need.