In its simplest form, estate planning requires careful consideration. When you are the parent of a child with special needs, it’s even more critical that you make the right choices when planning for your family’s future. One of those choices is whether to set up a special needs trust. Before you make any decisions, speak with a qualified Houston estate planning lawyer. The decision is an important one if you want to continue supporting your child with special needs after they become a legal adult. Here are three reasons you should consider creating such a trust. 1. You Want Your Child to Continue Receiving BenefitsMany adults with special needs rely upon public benefits such as Supplemental Security Income (SSI) and Medicaid. If you want to continue to support your child with special needs after they turn 18 without jeopardizing their benefits, a special needs trust can help ensure that they continue receiving them. If you were to simply give them money to live on, they would have to report that as income, which could put them over the income limits for their benefits. When you set up a trust instead, you can protect those benefits. Because the trust holds the assets that you fund it with—whether it is property or money—your child does not actually own those assets. As the beneficiary of the trust, the income that they receive will not affect their benefits. However, the income that your child receives from the trust must be supplemental. As an estate planning tool, though, a special needs trust is a great way to provide your adult child with a higher quality of life. 2. You Want to Ensure the Funds Are Used Only as IntendedLeaving an inheritance to a child without the protection of a trust allows for abuse to occur. You might think that you leave your estate to a trusted relative with the stipulation that it be used for the benefit of your child. But too many times, this type of arrangement leads to bad decision-making and betrayal. Without the protection of a trust, the estate you leave behind is subject to misuse and can be seized for outstanding debts. If you want to ensure that the funds you leave behind are used how you intend them to be used, creating and funding a trust might be right for your situation. 3. A Special Needs Trust Allows Others to ContributeBy establishing a trust now, you can multiply the amount of support that your child with special needs can receive in the future. How? By encouraging others, such as grandparents, to contribute to the trust. Anyone who wants to help can give up to $15,000 per year without incurring the gift tax. What is a Special Needs Trust?A special needs trust, as defined by Texas law is one that allows someone with disabilities to set aside money for their care. The special needs trust allows an individual with a disability to still be entitled to all government benefits. A designation of guardianship should also be considered when planning for special needs trusts. A temporary guardian can be designated depending on the location of the successor guardian. Temporary guardians can take care of the child while the permanent guardian is in place. Temporary health care agents may be needed in the event that the parent needs someone else to transport the child to the hospital. HIPAA authorizations are required for disabled children. They allow for access to medical records if needed. Special needs trusts are specifically created to provide money for beneficiaries. It doesn’t really matter what the amount is. They are eligible for benefits regardless of the amount. We tell our clients that even if you have one million dollars invested in a trust for special needs, your child can still receive government benefits – provided that the planning is done properly. Two methods can be used to fund a special needs trust. When we establish a trust for special needs, the parents usually open a savings account and deposit small amounts each year. A special needs trust can be funded by beneficiary designation. A beneficiary designation is a way for parents to leave a specific amount to their child, such as a gift to the special needs trust trustee. Wondering Whether a Special Needs Trust Is Right for You?The decisions you make regarding your estate plan can have consequences in the future. Want to make sure that you are making the best, most educated choice that you can so that your child with special needs can enjoy the quality of life that you want for them? I’d love to talk to you. Contact The Law Office of Whitney L. Thompson today so we can discuss how to approach your estate plan. Via https://www.wthompsonlaw.com/3-reasons-to-you-should-consider-a-special-needs-trust/
0 Comments
Leave a Reply. |
About UsHouston, Texas estate planning attorney The Law Office of Whitney L. Thompson is here to help with estate planning needs including trusts, wills, guardianship, and Medicaid planning. Attorney Thompson works hard to represent her client and ensure that they receive the best outcome possible. Call 281-214-0173 to schedule a consultation. ArchivesNo Archives Categories |