Special Needs Planning for Disabled Children: Protect Assets Without Affecting Benefits
Planning for the future of a loved one with special needs requires careful consideration. A common concern is:
“How can I leave money or assets to my disabled child without jeopardizing their eligibility for state or federal benefits?”
If assets are left directly to a disabled beneficiary through a will or trust, it could disqualify them from essential government benefits such as Supplemental Security Income (SSI) or Medicaid. Fortunately, there is a solution: a Special Needs Trust (also known as a Supplemental Needs Trust).
What Is a Special Needs Trust?
A Special Needs Trust (SNT) allows you to leave money or property to a loved one with special needs without impacting their current or future eligibility for means-tested benefits. Established under federal law, this trust is designed to hold and manage assets for the benefit of a disabled individual without those assets being counted against benefit thresholds.
The trust funds can be used to pay for items and services not covered by government assistance, such as:
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Educational expenses
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Travel and recreation
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Hobbies and entertainment
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Personal care items
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Home furnishings
Who Can Create a Special Needs Trust?
There are two main types of SNTs:
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First-Party Trusts: Funded with the disabled individual’s own assets, such as an inheritance or legal settlement.
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Third-Party Trusts: Created and funded by someone else (usually a parent, grandparent, or legal guardian) for the benefit of the disabled individual.
To determine which type of Special Needs Trust is right for your family’s situation, schedule a consultation online with our experienced attorneys. We’ll guide you through the options and help you create a plan that protects your child’s future without compromising their benefits.
