The importance of comprehensive estate planning is significantly heightened for the parents of a child with special needs. Like all parents, you undoubtedly want to protect and provide for your child to the best of your ability. Incorporating a special needs planning component in your estate plan is one excellent way to do just that. Within your special needs plan you may choose to include a Special Needs Trust. As the Grand Forks special needs planning attorneys at German Law Group explain, knowing what you can purchase with the assets held in a Special Needs Trust is important.
Special Needs Facts and Figures
Your child undoubtedly brings joy and happiness to your family. Raising a child with special needs though can be challenging and costly. It may also feel as though you are the only parent facing the emotional and financial challenges the often come with parenting a child with special needs. You are not, however, alone as the following facts and figures relating to special needs indicate:
- Nearly one-fifth of all Americans have a physical, sensory or intellectual disability, according to the National Organization on Disability.
- More than 41 million Americans, or almost 15% of the population age 5 and older, have some type of disability.
- Over 75 percent of special needs adults are without employment.
- Out of 72.3 million families included in the US Census Bureau Report, about 2 in every 7 reported having at least one member with a disability.
- 20.9 million families have members with a disability.
- One in every 26 American families reported raising children with a disability.
Why Is Special Needs Planning Necessary?
If your child has special needs, the odds are good that he/she will continue to require specialized care as an adult and that care will continue to be expensive. Between therapists, surgeries, specialized equipment, and caregivers the costs associated with a child who has special needs can be daunting. Although your legal obligation to support your child may end when he/she reaches the age of majority, your desire to continue to contribute to your child’s care and maintenance will likely continue. Care must be taken, however, in the manner in which you provide that financial assistance, or you could jeopardize other assistance your child receives from programs such as SSI, Food Stamps, or Medicaid. Many assistance programs have both an income and an asset test that applicants/recipients must pass to gain or retain eligibility. Consequently, an applicant/recipient cannot earn a significant income nor own valuable assets or benefits could be lost. Gifting anything directly to your child, either during your lifetime or in your Will, could cause your child to lose eligibility for much needed assistance programs.
What Can Be Purchased with a Special Needs Trust?
A Special Needs Trust, also referred to as a “Supplemental” Needs Trust or shortened to “SNT”, is a specialized irrevocable living trust that allows you to make gifts to your child without jeopardizing his/her eligibility for assistance. For a trust to be recognized as a special needs trust by SSI, Medicaid, or other assistance programs, very specific language must be used and the trust must be drafted properly, which is one of the many reasons it is in your best interest to work closely with an experienced special needs planning lawyer when you create your trust. Once created, you can transfer assets into the trust to be used to supplement the care provided to your child by programs such as SSI and Medicaid. Funds held in the SNT can be used to purchase extras such as a vehicle, a vacation, or furniture that is not provided by any of the government assistance programs. A properly drafted SNT can provide for your child both during your lifetime and after you are gone. In addition, other family members can contribute to the trust as well, increasing the assets available to be used for your child’s care and maintenance.
Contact a Grand Forks Special Needs Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about a special needs trust, contacta Grand Forks special needs planning attorney at German Law Group by calling 701-738-0060 to schedule an appointment.