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How a special needs trust can help

| Feb 10, 2021 | Estate Planning

Raising a child with special needs presents its own unique challenges. Parents in Texas have to consider not only how to care for their children during the present, but also in the future. This often involves ensuring continued financial support even after a parent’s death. A special needs trust can be very helpful for this purpose.

The purpose of a special needs trust

Many government benefits for adults and children with special needs are based on income. If a parent were to leave an inheritance to a child with special needs using a will, he or she could be kicked off of necessary benefits. Requalifying for those benefits would involve exhausting the inheritance. Examples of such benefits include:

  • Supplemental Security Income — SSI
  • Medicaid
  • Vocational rehabilitation
  • Subsidized housing

A special needs trust makes it possible for an heir to both receive an inheritance and keep his or her benefits. The money or other assets contained in the trust are not technically owned by the beneficiary, and a designated trustee will manage and distribute the benefits on his or her behalf. Funds from special needs trusts can be essential for accessing services not covered by government benefits, such as personal care attendants, home furnishings and even entertainment purposes.

Special needs trusts can also be helpful even when government benefits are not a concern. Trusts bypass the probate process in Texas, whereas wills do not. Parents who are worried about their child’s financial support in the future may do well to consider the benefits of creating a special needs trust.

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