Parents of adult children with special needs understandably worry about what will happen to their adult children after they pass away. Many people with disabilities receive government benefits, such as SSI, SSDI, and Medicaid, which are very important to their quality of life. If parents leave money directly to their adult child with disabilities the adult child will likely lose their government benefits. The way to solve this dilemma is to create a special needs trust.
Parents can leave money to their adult child with disabilities through a special needs trust and the adult child can still receive their government benefits. The money in a special needs trust cannot be used for items covered by government benefits such as food, but it can be used to cover many things that will improve the adult child’s quality of life such as transportation, clothing, hobby supplies, pets and pet supplies, and educational expenses. Often parents designate a sibling of the adult child with disabilities to be the trustee for the special needs trust.
Many families fund special needs trust by leaving a portion or all of their life insurance to the special needs trusts. A spouse can also set up a special needs trust for his or her spouse with a disability. Special needs trusts can provide caregivers with peace of mind about the future of their loved one with disabilities. Please contact us if you have any questions about how a special needs trust might benefit your family.