If you are the parent of a child with special needs you already know both the emotional joy and happiness, as well as the often difficult realities, of raising a child with special needs. One of your biggest worries likely revolves around the care and maintenance of your child when you are gone. During your lifetime, you have numerous opportunities and methods by which you can financially support your child, even after he/she reaches adulthood. Your ability to provide direct and ongoing financial support to your child, however, will die with you unless you plan ahead. Simply gifting assets to your child when you die is not an option because it may put your child’s eligibility for much needed state and/or federal assistance programs at risk. One commonly used solution is to create a special needs trust. For those who are unfamiliar with this type of trust, a special needs planning lawyer explains the basics of a special needs trust.
The Cost of Care
The financial cost involved in raising any child is high; however, if you are the parent of a child with special needs, those costs are probably significantly higher than average. For example, you may incur ongoing expenses for things such as:
- Specialized equipment
- Prescription medication
- Therapists (occupational, physical, speech etc.)
- Doctor visits
The Need for Continued Support
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. 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. While your child may qualify for assistance from various state and/or federal assistance programs, such as Supplemental Security Income (SSI), Supplemental Nutritional Assistance Program (SNAP – food stamps), Medicaid, or Section 8 housing, you will probably want to supplement that assistance to ensure that your child’s quality of life is the best possible.
The desire to provide continued financial support to your adult child with special needs is both understandable and admirable. As a general rule, providing financially for an adult child and/or gifting assets to an adult child does not present a problem; however, in the case of a child with special needs, doing either can actually cause more harm than good. If your child depends on assistance from programs such as SSI, Food Stamps, or Medicaid, gifting anything of value to your child could threaten his/her eligibility for benefits from these programs. 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 to your child, therefore, could cause your child to lose eligibility for much needed assistance programs.
How Can a Special Needs Trust Help?
A special needs trust, also referred to as a “supplemental” needs trust, is a specialized irrevocable living trust that allows you to continue to provide for 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 have a Fargo special needs planning lawyer assist you. 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. In addition, other family members can contribute to the trust and the trust may continue to provide supplemental care for your child long after you are gone.
Contact a Fargo Special Needs Planning Lawyer
If you have additional question or concerns regarding the creation of a special needs trust, or about special needs planning in general in North Dakota or Minnesota, contact the experienced North Dakota and Minnesota special needs planning attorneys at German Law Group by calling 701-738-0060 to schedule an appointment.