Why Establish A Special Needs Trust Early
A Special Needs Trust (SNT) can help protect a loved one with a disability while preserving essential public benefits like SSI and Medicaid. Setting up an SNT early can ease long-term planning and bring peace of mind.
An SNT holds assets for an individual with a disability without affecting eligibility for means-tested benefits. It can supplement, but not replace, government support, funding needs such as education, therapies, medical devices, recreation, and personal care. There are different types of SNTs depending on your situation, including those funded with the individual’s own assets, those funded by family members, and pooled trusts managed by nonprofits.
Establishing an SNT early helps protect your child’s future benefits by ensuring inheritances or gifts don’t disrupt eligibility for SSI or Medicaid. It also allows investments within the trust to grow over time and enables family members to contribute directly to the trust rather than to the individual, which could jeopardize benefits. Setting up an SNT while you are healthy provides reassurance that your child’s needs will continue to be met, even if life changes unexpectedly.
The process begins with assessing your child’s current and future care needs, including medical, housing, and personal support. It involves deciding how to fund the trust, selecting a trustee to manage and distribute the funds responsibly, and working with professionals such as a special needs attorney and financial advisor to ensure the trust is structured properly. Once created, assets can be transferred to the trust, and your will and insurance policies can be updated to name the trust as the beneficiary. It is also helpful to write a letter of intent describing your child’s daily routine, medical history, and preferences to guide future caregivers. Finally, reviewing the trust regularly ensures it adapts as your child’s needs or laws change.
An SNT is more than a legal document; it is an act of love and preparation, ensuring your child with a disability can live a secure and meaningful life with the support they need. We are here to help you incorporate this important tool into your broader estate and financial plan.
Read more: The Benefits of Establishing a Special Needs Trust Early
