New Hampshire parents of special needs children know that their children will need to have long-term financial support past the usual age of adulthood. As a responsible parent, it’s advisable to establish a special needs trust to ensure financial support is in place in the event that you die. If you’re like most parents, you may not be familiar with this particular type of legal entity.
What is a special needs trust?
Estate planning strategies can incorporate the need for a special needs trust if a person with disabilities is to receive benefits after the grantor passes away. Special needs trust are typically established by parents and guardians of special needs children. When setting up this type of trust, the grantor will need to name a third-party trustee. This trustee is typically a sibling, attorney, close friend, caretaker or another family member who is to be given the responsibility of disbursing the assets of the trust to the beneficiary.
Why use a special needs trust instead of a traditional trust?
A special needs trust can easily be established in a way that prevents any hindrance with your child’s federal benefits. Special needs children may be naturally entitled to government benefits like SSI and Medicaid. Unfortunately, many of these benefits are only available to those with very limited income or assets. Typically, the asset level is set at a very low amount of around $2,000. For this reason, it’s important for a parent concerned about the financial well-being of their special needs child after their passing to be mindful of how they transfer their assets.
Special needs trusts can be a great tool for parents who want to ensure the future well-being of their children. This type of trust is specifically designed to prevent the interference of government benefits in the future. If you have a special needs child and believe such trust may be beneficial for them, it’s advisable to speak to an attorney to discuss the process.