Most people with young children understand the importance of planning for their care in the event of death or incapacitation. For many families, a life insurance policy and carefully crafted will may be enough to protect the children and ensure they have care and assets for the future. However, if your family includes a child with autism, Down syndrome or another serious disability, a standard last will and estate plan may not suffice.
Special needs children grow up to become special needs adults, many of whom still require daily care and support. While some may be able to live on their own with minimal outside intervention, others will require extensive support systems and even around-the-clock care. Depending of the situation, it may be in your family’s best interests to create a special needs trust to provide for and protect your child.
Special needs children and adults are at risk of abuse
If something were to happen to you, your special needs child could be at risk of abuse by caretakers. Even someone you knew and trusted could resent the work required to care for your child and lash out by becoming physically, emotionally or financially abusive. Some people may abuse a position of trust, such as caretaker or guardian, for their own benefit, using up resources intended for your child.
People with special needs may not have the ability to detect this abuse or speak out in their own defense if they notice it. Even more sad is the fact that authorities may not listen, even if they do speak out. Creating a special needs trust, with careful consideration for who will serve as trustee, is one way to try to ensure that your child is not needlessly at risk for abuse or mistreatment.
A special needs trust could protect and provide for your special needs heir
There are many possible benefits to creating a trust as part of your estate plan, which is one reason why there are many kinds of trusts. A special needs trust can serve several purposes. First, it could reduce the financial strain of a lump-sum inheritance. It could address risks that your estate could push your child out of the income and asset brackets for state health insurance and care.
Your special needs heir may also struggle with financial management. A trust can allow you to limit how much someone can withdraw and what the funds may be used for. Other benefits of a trust could include limiting tax liabilities and even helping your child stay in the family home while receiving aid for medical care. Placing your home in the trust is one way to try to protect your child and ensure there are sufficient supports in place for when you pass on.
You may also decide to appoint more than one trustee to help ensure that no one takes advantage of your child. A trust could empower your special needs child to live an independent future while providing you with the peace of mind that comes with proper planning for the future.