Setting Up a Special Needs Trust for a Disabled Loved One


A woman reading the paperIf you are the caregiver for a child or family member with a disability, planning for their future care is not only smart, but gives you greater peace of mind. A trust designed to address “special needs” can help streamline estate planning — but there are many details to consider when establishing one.

To get started, evaluate the severity of the disability, and whether the disabled individual has the potential to be self-sufficient or may qualify for government benefits. Estate planning varies greatly for a severely disabled person who may eligible for government assistance, versus a mildly disabled person who has the capacity to be somewhat self-sufficient.


If the individual is eligible for government assistance or benefits (either now or in the future), you should determine whether eligibility for programs is “need-based,” or based solely on the person’s disability. To be eligible for need-based programs such as Supplemental Security Income (SSI) and Medicaid, the disabled’s assets will be evaluated. For example, SSI applicants cannot have more than $2,000 in assets to be eligible.

If the disabled directly inherits more than the asset limit, government assistance will be interrupted. However, if a Special Needs Trust or Supplemental Needs Trust is established, money can be made available for the beneficiary, but since it is not under the beneficiary’s control, it is not counted as the beneficiary’s personal assets, therefore any government assistance continues uninterrupted.

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