Life is unpredictable, especially if you are a parent of a
child with special needs. The one
thing that should not be unpredictable is what would happen to your child if
anything were to happen to you. Making
the proper plans now by setting up a trust fund can secure your child what he
needs in the case of unlikely circumstances. Parents of a child with special needs need a trust fund,
regardless of their age or wealth.
Setting Up a Trust
You can set up and use a trust fund now, appointing yourself
as the trustee (the administrator of the special needs trust fund). By setting up a trust now, you can save
money for future needs or pay for current needs by setting up the trust fund as
a checking account. The latter idea
is extremely helpful for tax-deductible purposes, as well as a guide to show
how you want the money spent when you are gone.
Furthermore, many families have family members that would
like to leave their child with special needs some wealth in their will. Inform them that they should assign your
child’s inheritance to the trust fund so that any extra money or assets cannot
disqualify your child for Social Security or Medicaid benefits.
Many families may worry about setting up a trust fund now
because they may feel that they will not be able to use the money for something
else in the future. However, there
are two types of trust funds available. Setting up a revocable living trust allows you to change your
trust at any time. These trust
funds are more expensive and time consuming, but worth it in the end because
they allow you more freedom to change the trust if certain circumstances occur,
such as wanting a different trustee. You will be able to get your money out of the trust fund if
you need to, though it will be counted as your assets for tax purposes.
Choosing an irrevocable trust means that you have given up
all of your rights to the money. Therefore,
the money in the trust fund can only benefit your child with special needs in
the way you originally set up. However,
this money is not taxed and not considered part of your estate if you were to
It is essential to set up a trust fund for your child with
special needs. Setting one up now
can benefit your child and the whole family, if done properly. Speak with a professional, such as an
attorney or trust advisor, to better decide what kind of
trust fund is right for your situation.
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