One of the main reasons to begin estate planning is to find a way to provide for children in the event of your untimely death. This need becomes more urgent if you have a child with special needs. Indiana residents can protect the future of their special needs offspring via a special needs trust.
How special needs trusts are different
A special needs trust is a financial trust with a difference; a trustee will manage the money set aside for the named third party, your special needs child. The trust will allow the designated special needs individual, whether a child or an adult, to access the funds to maintain quality of life. At the same time, the trust is structured so that the beneficiary remains eligible for governmental programs that also affect the quality of life, regardless of the money in the account.
Establishing a special needs trust
The basics of setting up a special needs trust are much like setting up other kinds of trust. You name one or more trustees, draft the trust documents, sign and notarize them, open the account, and begin funding it. Three types of special needs trusts are available: third-party, first-party and pooled trusts. The advantage of establishing special needs trusts instead of requesting the money in a will is that the funds can be used immediately. You can also get others to contribute funds, depending on the trust type chosen, while your child remains eligible for government assistance.
Establishing a special needs trust can be expensive. However, if you believe that your child will need a considerable sum to maintain a comfortable living after you pass, consulting an estate attorney knowledgeable in drafting these financial instruments can help you avoid pitfalls and ensure your child’s future for years to come.