Many families of children with special needs make the common
mistake of not setting up a trust fund. The families think that there is no need to since they are
still healthy and young, or they think it may be a waste since they do not have
a lot of money saved up. Both of
these reasons are harmful excuses for not setting up a
special needs trust fund.
While it is not pleasant to think about, something could
happen to you and your spouse at any time. This would truly be a heartbreaking situation, and if you do
not have arrangements made for your special needs child and your assets, then
it could become a huge problem.
Even if you are not wealthy, it
is still essential to set up a living trust for your child. Your child is most likely receiving
assistance from SSI or Medicaid. These
two government programs have strict rules saying that people on disability can
only make a certain amount per year -- usually $2,000.
Therefore, if you and your
spouse were to pass away, any liquid assets over $2,000 left for your child
would disqualify them from SSI and Medicaid. Your child would have to spend all but $2,000 of his
inheritance before they can qualify for SSI or Medicaid again.
The Purpose of a
The purpose of a trust fund, also referred to as a Special
Needs Trusts or Supplemental Needs Trusts is to benefit your child with special
needs alongside with their SSI and Medicaid. The trust can cover the extras that are not covered by SSI
and Medicaid. If the trust is done
properly, then the assets your child receives will not be considered as income.
A trust fund for your child can be set up by anyone. The parents of the child usually set up
the trust fund, but there are some instances where a close friend or
grandparent wants their inheritance to benefit your child.
Appointing a Trustee
When you set up a trust fund, you will need to appoint a
trustee. A trustee is a person or
entity that is appointed by you to distribute and manage your trust in
accordance to the trust’s documents. The right trustee can put your mind at ease that your child with
special needs will be taken care of financially if anything were to happen to
Whether you consider yourself healthy or feel as if you do
not have a dime to your name, it is still essential and highly recommended to
set up a trust fund for your child with special needs. No one will be able to take care of your
child like you can, but by properly setting up a trust fund for your child puts
them in a better situation if certain circumstances arose.
Photo by photon_de