If you have a child with a disability that you’d like to take care of if you pass away, then you may want to set up a special needs trust. A special needs trust is created to hold assets that are to be managed for another person’s benefit. For example, you could set aside $100,000 for your disabled adult child and have a trustee manage those funds for them.
Special needs trusts are designed for those with both physical and mental disabilities. This includes people who cannot manage their own finances. These trusts can be used to make sure beneficiaries don’t lose government benefits, which is a primary benefit of setting one up.
Can’t any kind of trust protect the assets you want to leave to your child?
Yes, every kind of trust can provide some kinds of protection, but special needs trusts are designed to address the specific needs of those with disabilities. They’re designed to protect your child’s government benefits, so you have the peace of mind of knowing they have what they need when you’re gone.
Beneficiaries cannot directly access the special needs trust. Instead, the trustee can buy things for them, like vacations, items for their home or vehicles. The trustee can also pay out for medical or dental costs, education, recreation, physical therapy and more.
If you are interested in a special needs trust, your attorney can talk to you more about the types that are available and how they may help you protect your child’s inheritance. Our site has more information.