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 Fund Now
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 die.
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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