Why is a Special Needs Trust necessary?
A special needs trust makes it possible to appoint a trustee to hold property for the benefit of your disabled child after you're gone.
A special needs trust also provides for the needs of a disabled person without disqualifying him or her from benefits received from government programs such as Social Security and Medicaid. Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services. Medicaid eligibility also makes a disabled person eligible for many local community services, as well. Monthly SSI benefits can be spent on food, clothing and shelter. You would not want to leave property to a disabled child that could disqualify him/her from receiving benefits which could make life better.
A special needs trust avoids potential problems within a family. The family will have your wishes and intents spelled out for them. One way to be clear about what you intend for your disabled child's future is to make a "Letter Of Intent" to be given to his or her trustee at the time of your death.
Special needs trust money can also be spent for funeral and burial expenses.
The next blog will cover Funding a Special Needs Trust Account.