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When having a special needs trust is beneficial

On Behalf of | Nov 22, 2021 | Estate Planning

Parents in Maryland have an obligation to and generally want to provide for their children while they are raising them. They provide for these needs and try to provide guidance and advice so their children can begin providing for themselves when they are adults. Some parents provide for their children longer than others, but most children can eventually provide for themselves. However, some children have special needs which will prevent them from ever being able to adequately provide for themselves.

Parents will continue to help these children potentially throughout the rest of their lives. They will also want to ensure that these children are taken care of properly after they pass away. They may leave them a significant inheritance to ensure their needs are met.

Doing this may actually cause more harm than good though. When children with special needs become adults they may qualify for certain governmental benefits to help them through life. This can include potentially free health insurance. However, these governmental programs generally have income and asset limitations to be eligible for the benefits. Receiving a large inheritance can actually make them ineligible for these benefits.

Benefits of a special needs trust

Parents who find themselves in this situation may want to consider having a special needs trust for the children. This allows the parents to put money and assets into the trust for the benefit of the child, but the child will not have any control over the assets. The trustee will be the one to make the decisions and actually provide the child the assets. By doing this the assets in the trust are not considered assets of the child and will not be used when determining eligibility for governmental programs.

Many parents in Maryland have children with special needs. They may be concerned about how they will be cared for after they pass away. One of the best ways they can ensure that the children’s needs will be met is through a special needs trust. They need to be set up correctly though to be effective and consulting with experienced attorneys can be beneficial.

 

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