According to the CDC, about 17% of American children aged below 17 years had developmental disabilities in 2017. Mobility affects 1 out of 7 of these kids with special needs. If you have a child or family member with special needs, you must go the extra mile to keep them comfortable.
Financial support often forms the immediate essential concern for any parent or guardian with a special needs child. A special needs trust can cushion your child financially in your absence.
Are you taking care of a person with special needs and wondering how to set up a special needs trust? Your child requires medical care, mental health support, and unique educational services. You can set up a special needs trust to deal with these overwhelming financial burdens in case of your sudden death.
This article offers you critical information on how to set up a special needs trust
What’s a Special Needs Trust?
A special needs trust exists to provide funds in support of a person with a disability. The importance of a special needs trust is to ensure that the specific individual remains eligible for government benefits even if they have other funds. A special needs trust exists to enhance the quality of life for such special needs individuals.
Are you a parent of a special needs child? Think of what might happen if you were no longer on earth to take care of such person.
A special needs trust allows other people to contribute directly to the welfare of the special needs child. The advantage is that this happens while preserving eligibility for Supplementary Security Income and Medicaid for the individual.
Why Is a Special Needs Trust Important?
A special needs trust allows a parent or caregiver to put aside money that can support the vulnerable individual in the future while ensuring that the U.S. government special needs benefits still apply. The catch is that the special needs individual cannot have more than $2000 in cash assets.
Any monetary gift, settlement or inheritance that’s above the $2000 limit can portend disqualification from the government’s special needs benefit support. Such a barrier may present economic frustrations for your loved one in the future.
Steps on How to Setup a Special Needs Trust
If you are keen on ensuring that your loved one’s future is secure, you should consider setting up a special needs trust.
Pick the Right Trust
Your choice of trust has lasting implications on the process of deposit and withdrawal of funds. You need to understand the goal for the fund and then determine how you wish to run the trust. A third party who is often a close family member such as a parent or a grandparent can manage the special needs trust.
The special needs trust is coordinated through the family estate plan. This arrangement allows the trust to hold money or property on behalf of the beneficiary. This is what it means for a trust to be under the funding of a third party.
The other type of trust is the Pooled Disability Trust. This option is self- funded by the person with a disability. In the case of pooled disability. Trust funding may be through a personal injury award or direct inheritance. Pooled disability trusts help to manage routine expenditure, but the difference is that the pooled trust program should be under a corporation.
The government often demands reimbursement in case the beneficiary dies. This is the primary reason why a pooled disability trust must be under a nonprofit corporation’s management. Once you decide on the type of trust you need, you can proceed to the next step.
Consider Professional Support
Considering professional help when setting up a special needs trust is essential. You need legal assistance from a special needs attorney to help you navigate the process of setting up the trust. With the support of a special needs attorney, you can plan for the care of those you love with sufficient legal guidance.
Getting professional support helps you navigate the various critical aspects of setting up the special needs trust. You need to address legal matters such as wills, powers of attorney, and guardianship. As such, it’s crucial to have a special needs attorney during the process of setting up the special needs trust.
Decide How Much You Want to Put in the Trust
A critical question that emerges when setting up a special needs trust is how much is enough. However, it’s hard to quantify how much should be enough. The actual amount of money on the special needs trust depends on the nature of the disability and the actual level of care needed.
Are you wondering how to set up a special needs trust? Experts recommend that the least you can have is $100,000 when setting up a special needs trust. There’s no maximum to the much you can put on the Trust fund.
Choose a Trustee
This is one of the most challenging steps when creating a special needs trust. Trustees need to have the necessary expertise to help them manage the special needs trust. The individual(s) you entrust with being trustees should be people with the capacity to make sound investments, pay bills, and keep accounts on behalf of the special needs individual.
A Trustee can be a parent or another trusted relative. You may also consider professionals such as accountants or lawyers. The trustee needs to be familiar with public benefit programs. This is critical in protecting the beneficiary’s eligibility for the government’s benefits at all times.
You must also ensure that the trustee has the time to respond to the beneficiary’s needs at all times in case you are no longer available. The other critical consideration when choosing a trustee is the level of trust. You can select a family member and an independent trustee as a co-trustees in case you have trust issues.
Put Together the Team
A special needs trust should outlive everyone else as long as the beneficiary is alive. It’s critical to incorporate a team of committed people to oversee the welfare of the recipient in the long haul. Apart from advocates, other considerations should include physical and mental health specialists.
You should also involve a member of the larger family in the process. The team is supposed to be there for the beneficiary in your absence. The idea is to make the team as robust as possible.
Setting up a Special Needs Trust Is a Lifeline for Your Loved One
Children with special needs experience varying challenges in life. It’s worse if the parent or guardian dies or is incapacitated. The best you can do for your loved one living with special needs is to set up a special needs trust.
The trust not only secures funding for your child but also ensures that the beneficiary also accesses the government’s special needs benefits. With the help of a reliable special needs attorney, your doubts on how to set up a special needs trust are no longer neccesary.
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