Caring for a son or daughter with special needs can be a rewarding yet challenging experience. If you’re one of many parents in Texas who worry about how your child will get by after you die or if you become incapacitated, you might want to consider the estate planning process to provide for your loved one. By executing a special needs trust, you can at least ensure that money is set aside to provide for expenses associated with your son’s or daughter’s needs.
One of the greatest benefits of a special needs trust is that it doesn’t cause your child to lose any government assistance he or she is eligible to receive. To determine eligibility for such programs, the court takes income into account. The court does not calculate monies held in a trust as income when determining eligibility for Medicaid or Supplemental Security Income (SSI) benefits.
What types of expenses does a special needs trust cover?
When you set up a special needs trust, you will appoint a trustee to manage it. This person will dispense funds as needed and according to any instructions you provided when you initiated the trust fund. You can use such funds to pay medical bills and cover transportation costs for physical therapy sessions or other appointments and much more.
A standalone takes effect while you are still alive
Another benefit of a special needs trust is that there are several types, including a standalone trust, which is accessible before you die. You may even invite others to contribute to this type of trust fund. It is an estate planning tool recommended to parents who plan on financially supporting a son or daughter with special needs throughout their lifetime.
If, on the other hand, you want the funds in a special needs trust to be an inheritance, then you will not initiate a standalone trust but a testamentary trust, which receives funds after you die. You can incorporate instructions, such as how much money the trust should receive, how often (and when) the beneficiary should receive payments and what should happen to remaining funds if the beneficiary dies.
Always check state laws before estate planning
Texas, like all other states, has its own estate planning laws. It’s best to seek clarification of such laws before executing a plan. For example, if you sign a last will and testament, it’s important to know whether you need witnesses or must have the document notarized. Someone experienced in estate laws can provide guidance and support throughout the process.