When you’re in the process of estate planning, it’s normally fairest to divide your assets equally among your children. In some circumstances, however, it’s necessary to allocate a larger portion to one child over the others. This is where special needs trusts come in.
When Do You Need to Give One Child More Than The Others?
You might need to create a special needs trust if:
- One of your children has special medical circumstances
- One of your children needs supervision or aid
- One of your children is less financially independent than your other children.
What Is a Special Needs Trust?
If you want to leave money or assets to a child or family member who has a disability, you have to be very careful to do it right. Without setting up a special needs trust in your will, you could jeopardize your child’s applicability for receiving public benefits that they badly need, such as Medicaid and Supplemental Security Income (SSI).
Creating a special needs trust allows you to bypass that situation. In this type of estate planning, you leave your assets to a trust instead of gifting them to your child and thereby disqualifying them from much-needed assistance.
Two Types of Special Needs Trusts
When you’re creating a special needs trust for your child, you’ll want to carefully choose the right type of trust for their needs.
First-Party Special Needs Trust
With this type of special needs trust, the person with special needs gets control of the trust. Their access to public benefits isn’t jeopardized because the assets are put into this trust rather than to the beneficiary directly.
Third-Party Special Needs Trust
This is the more typical type of special needs trust, where a trustee other than the person with special needs gets put in charge of the trust. The trustee is given special instructions to abide by, and is put in charge of spending the funds wisely on care for the person with special needs.
Do I Need an Estate Attorney?
Estate planning is complicated. When it comes to setting up special needs trusts, you want to be sure to do it properly. That’s why it’s important to hire an attorney to help you with this process. Mark Weseman can give you the legal advice you need to protect your family and loved ones.