Benefits of a Special Needs Trust

Carol Morgan’s son has Downs Syndrome. While Carol marvels at her son’s ability to adapt, she sometimes worries that Daniel will not be properly supported when she is gone. Her anxiety is shared by hundreds of thousands of parents around the country.

Ease of Mind with a Special Needs Trust

A special needs trust allows you to save for your child’s future in a way that won’t jeopardize his or her ability to receive government benefits. Also called a “supplemental care trust,” the special needs trust provides a clear way to supplement your child’s benefits, such as Supplemental Security Income (SSI) and Medicaid. It can be set up to begin while you’re alive or to be set into action upon your death.

Pacer.org describes the way it works. You select a trustee, someone you would literally trust with your child’s well being, and someone you know can properly manage money. This person’s function is to distribute money to your child in a way that won’t disqualify him from government benefits. After your passing, the trustee’s function is to transfer money from your estate into your trust, and then to your child according to your wishes.

Primary Benefits of Special Needs Trust

When a parent like Carol Morgan comes to us with concerns about protecting his or her child’s future, we underscore the value of the special needs trust. Not only does the trust help ensure that your child will be cared for financially, but it also gives you peace of mind as a parent.

An additional benefit of this trust is that friends and family are able to make gifts of money, helping to contribute to the financial well-being of your child. Carol Morgan was especially grateful for this benefit when her father passed away, leaving money in Daniel’s trust.

How to Fund Your Special Needs Trust

According to the Social Security Administration, your child may become ineligible for government benefits if ever he accumulates more than $2,000 in assets. This is an obvious problem in regard to saving for your child’s future.

Some of the ways to fund your special needs trust in order to get around the $2,000 in assets rule are:

• Through gifts, assistance, and inheritances from friends and family
• Life insurance
• Military benefits
• Property, such as the family home
• Standard government benefits, such as survivor benefits and Social Security

How Funds Can be Used

Although every state has a different set of rules regarding how funds from a special needs trust can be used, generally speaking, it is acceptable to use this money toward supplemental needs. We can help you figure out how to handle California-specific regulations.

Acceptable uses include:

• Home health aid
• Computer equipment
• Education
• Transportation
• Rehabilitation
• Medical and dental care not provided by government benefits.

They cannot be used to pay for:

• Food
• Housing
• Property taxes
• Utilities
• Home insurance
• Transferring cash to your child

Set Up Your Special Needs Trust with the Help of an Experienced Attorney

Here at Christopher B. Johnson, Attorney at Law, we have a special affinity for special needs children and their families. We have set up enough trusts to see, first-hand, the benefits they reap. Call us at (888) 838-8771 for an appointment to discuss your estate planning strategy.