If you have a family member with special needs, you might face emotional and physical issues, but you also may be concerned about maximizing the financial support your loved one requires. Consequently, you may want to consider establishing a special needs trust.
This type of trust can help maintain the financial security and lifestyle of an individual with special needs. Furthermore, a special needs trust can allow the trust’s beneficiary to receive financial support for supplemental needs without losing public benefits, such as Supplemental Security Income (SSI) and Medicaid.
Here’s how it works: You, as the trust’s grantor, establish the trust and name a trustee who is responsible for managing the trust. You can fund the trust with gifts throughout your lifetime or from other sources, such as inheritances or court settlements. But another popular funding mechanism is life insurance, which the trust can purchase on the life of one or both parents of a special-needs child. And as long as the trust is also named the beneficiary of the policy, government benefits will be protected.
