Special Needs Trust: 4 Questions You Need to Consider
Estate planning can be especially challenging for families touched by autism. Enhancing an estate plan with a special needs trust is advisable. While it is essential to be guided by a qualified estate planning attorney, with a concentration serving special needs families, parents of children with autism spectrum disorders should have a basic understanding of how this trust works. Parents must ensure there will be sufficient funds in the estate to provide for the autistic child after the parents no longer can due to disability or death. Even more important is using estate planning tools that will not jeopardize the child’s government benefits such as Medicaid or Supplemental Security Income (SSI). To qualify for these benefits, individuals cannot have assets in their own name in excess of $2000, with the exclusion of a home, a vehicle and basic personal items.
Simply stated, a special needs trust is an instrument that enables an individual with ASD (autism spectrum disorders) to continue receiving government benefit programs, while also maintaining a quality of life in accordance with the parents’ wishes. When exploring the option of incorporating a special needs trust into a family plan, there are 4 choices that parents will need to face.
1. What are you looking to accomplish with this trust? There are many stipulations placed in special needs trust and how they are drafted. The trust must be established by the family and/or persons other than the individual with autism. Parents need to understand the need for a trust and in doing so should seek professional help from an advisor or estate planning attorney as mentioned above. Because the regulations are complex, make sure to select an individual who specializes in these types of trusts. Also be sure to address the purpose for the trust which may include where the individual will live, what type of treatment the child or individual should receive, what specific social activities, etc. The purpose of the trust should be conveyed to an advocate. Parents or guardians can express their wishes with a letter of intent that can ensure those making decisions for your child have the information they need.
2. What type of trust is best for your situation? There are several types of trusts that can be used to meet your specific objectives. Visit our article, “Choosing a Special Needs Trust: Which One is Right for You”, to view some available options.
3. Who will act as the trustee? The trustee manages and invests the funds for the trust and makes disbursements that are for the sole benefit of the beneficiary. The trustee can be a family member or a close friend who knows your child and who is organized, has financial knowledge but more importantly who is ethical. You can also choose a professional trustee. Irrespective, the trustee has to have an understanding of expenses that can and can’t be provided for under the special needs trust.
4. Who will act as the advocate? It is just as important to choose the correct advocate as it is the correct trustee. The advocate is someone designated by the individuals funding the trust. They are generally someone close to the beneficiary who understands the grantor’s (individuals who are funding the trust) wishes and the beneficiary’s needs. This advocate will work closely with the trustee. The grantor should complete a set of instructions that will specify how they want the beneficiary to be cared for and make sure to include the name of the advocate.
The cost of treating, educating, housing and care services for individuals on the autism spectrum is rising. The special needs trust is designed so parents can leave resources to be used for the care of their child. The most important point to remember is this: to sustain eligibility for government benefits, the trust must adhere to government rules and regulations. That is why it is particularly important that an experienced, special needs attorney draft the vehicle.
About Charles Massimo
Recognized as industry expert and guest speaker at national industry conferences, Charles Massimo is a published author and media subject expert on topics ranging from wealth/asset management to investment and financial planning for high net worth families, families with autistic children and closely-held businesses.