Your job is to create an estate plan that puts your mind at ease, regardless of how complicated your situation may be. When you make the right decisions, you’ll never have to worry about what will happen to your loved ones in the event of your passing.
With all this in mind, it’s time to talk about a special needs trust. This isn’t something that everyone has to create, but if you find yourself thinking about this there’s a good chance that it could help you and a loved one in some way.
In short, a special needs trust is created to ensure the future well being of a family member, such as a child with a disability. Remember this: the way you leave this person your assets will have an impact on his or her life.
There used to be a time when a will was all you needed. Now, with many things changing, you need to consider other options such as a special needs trust.
Why Create a Special Needs Trust?
Above, we talked about the primary reason to create a special needs trust. In case you forgot, this is something you do to ensure that a family member with special needs is cared for, even after you are gone.
There’s a lot to think about when creating a special needs trust, but here’s the one detail you need to keep in mind: the trust should be created in a manner that it doesn’t harm the person’s ability to qualify for government aid, such as Medicaid.
Despite the fact that this sounds like a confusing estate plan arrangement, it’s anything but that. Sure, it takes some time to understand what you should and shouldn’t be doing, but things will soon come together.
Here are some of the primary details to consider as you get started:
- Name a guardian for your child. This is the person who will take over your responsibilities if you’re no longer around.
- Name a trustee. This is one of the most important steps, as the trustee is responsible for managing the assets.
- Be clear in regards to your child’s needs. From housing to education, from personal to medical needs, you must make sure the trust shares information on how the person currently lives.
When to Create a Special Needs Trust
If you have a special needs child, for example, you don’t want to wait to create a special needs trust.
You’re not required by law to create this type of trust, but it will give you and your child peace of mind.
Let’s put it this way: as you focus on other details of your estate, you should also take the time to create a special needs trust. This will ensure that all the appropriate details are accounted for.
Tip: although you may have created a special needs trust in the past, keep in mind that things change over time. Maybe your child no longer needs as much outside care. Or maybe your child needs more care than ever before.
Since your overall situation can change, don’t hesitate to alter your special needs trust as necessary. As a general rule of thumb, it makes good sense to review the trust at least once per year. This way, you never have to worry that something could go wrong.
At this point, you may realize that you need to create a special needs trust. The final step is actually getting started.
Like many, you may believe that you can create a trust on your own, without the help of an attorney. While this is something you may consider, we want you to think twice before moving forward. Instead, download our report entitled “Dangers of Do-It-Yourself Wills and Living Trusts.”
With this report in hand, you’ll better understand the risks associated with a do-it-yourself special needs trust. From there, you can then make more informed and confident decisions.
In the end, what matters most is that you create the right type of trust at the right time. When you consult with an estate planning professional, this is much easier to accomplish.