Having a child with special needs in the family often means that people need to learn about different systems and rules than they would in other households. People have to learn to navigate the special education programs at the local public schools and often have to help support their children with complex healthcare matters. They also generally need to consider their child’s long-term care requirements, as (depending on the nature of their special needs) they may never live independently.
Estate planning can look very different for those with a dependent family member who has special needs, as a result. For most families, a special needs trust could be a viable option, but people too often convince themselves that it is too complicated to create a trust, often because of one of the two issues discussed below.
1. They worry about funding
One of the most common misconceptions that will prevent people from starting a special needs trust is the idea that they need a million dollars or more in liquid capital on hand to start the trust. Yes, it may be particularly easy for those with significant resources to fund a special needs trust, but the average parent can potentially put a trust together to support their child and fund it if they plan ahead.
In some cases, people will execute deeds so that their real property will transfer to the trust, thereby providing their child with both financial resources and shelter when they die. Other times, people may use life insurance proceeds to fund a trust. There are many options depending on someone’s current financial services.
2. They don’t know who to name as the trustee
A trust doesn’t just safeguard resources. It also connects someone with a trustee that will oversee the distribution of those assets. Parents often question who could step into their role and provide guidance and financial support for their child.
The right choice will truly depend on the circumstances. Sometimes, it will be family members or friends that can provide the best support for someone with special needs. Other times, what they really need is a professional fiduciary to manage their resource.
Exploring every option with the assistance of a legal professional can help those who are hoping to create a special needs trust for the benefit of a loved one.