Children with disabilities present a unique challenge for parents who are looking to engage in estate planning. For one, you will want to optimize your estate to use, enhance, and enrich assets for your child. At the same time, maintaining their enrollment in public benefits programs is no doubt going to be essential.

To ensure you meet both of these objectives requires careful planning. The experienced attorneys at Kommer Bave & Ciccone LLP can prepare a special needs trust to accomplish these and other goals you may have for your child.

How a Special Needs Trust Works

Qualifying for means-tested assistance programs, such as Supplemental Security Income (SSI) or Medicaid, typically requires benefits recipients to meet strict financial criteria. A special needs trust can help an individual with disabilities meet these stringent rules. This is because the assets held in this type of trust are not directly available to the child.

A trustee of a special needs trust provides benefits to the child via the trust. Parents should select this trustee with great care. The trustee will act as the child’s money manager, ensuring proper supervision of their finances in the event that the child’s parents pass away.

A letter of intent can also be a powerful tool that helps to guide the trustee in making decisions that will best serve the child’s unique needs. (Learn more about what details you should consider including in a letter of intent for a child with a disability.)

Choosing a Trustee for a Special Needs Trust

In most cases, your child will benefit from you selecting a dependable individual to serve as their special needs trustee. You may wish to select a person who is not a family member and who would be independent in carrying out this role.

You have a range of options, including the following:

• A parent, sibling, or another relative (which, again, can be risky)
• An experienced estate planning attorney or special needs planning attorney
• A financial institution or a trust company
• A nonprofit organization, particularly one with special needs experience
• Co-trustees, such as a trust company, acting in conjunction with a family member

Each of these options can have advantages and drawbacks. Keep close counsel with your estate planning attorney or financial advisor before you select a trustee.

When to Set Up Your Special Needs Trust

The creation of your special needs trust can happen while you are living or at the time of your death.

Parents often set up the trust while alive; this is known as a living trust (or inter vivos trust). A living trust boasts certain advantages, such as:

• avoiding probate;
• permitting other family members (for example, grandparents) to make trust contributions; and
• giving a co-trustee the opportunity to experience what it is like to administer the trust.

Alternatively, a last will and testament can incorporate creating the trust, known as a testamentary trust.

Why Special Needs Trusts and Estate Planning Are Important

Verbally telling your family how to care for your child is insufficient. In the absence of a will or trust, the state in which you live may determine the outcomes of your estate’s distribution. This situation is not a viable option for a child with special needs or any of your children.

Receiving proper legal guidance on the appropriate trusts to use in your estate plan is crucial to your child’s future. Do not attempt to craft these legal documents on your own, use existing forms, or copy an online internet template. Each child with special needs requires careful considerations unique to them and the challenges they face.

With so much at stake, be sure to seek out the qualified attorneys at Kommer Bave & Ciccone LLP. Our attorneys have expertise in the area of special needs planning, and can tailor your estate plan to best suit your wishes as well as the specific needs of your child. Protecting public benefits such as SSI and Medicaid will help safeguard your child’s well-being into the future. Establishing a special needs trust through the estate planning process is a key way to achieve this goal.

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