Special needs trusts are increasingly popular. For the first time in history, many disabled children are likely to outlive their parents by a lengthy time period. Parents in this situation must project how much money might be needed over the years for special vans, housing, and so on, and provide for their loved ones.
In many cases, special needs trusts are designed to provide beneficiaries with the money necessary for such items yet preserve their eligibility for federal and state programs such as Supplemental Security Income (SSI) and Medicaid. There may be programs that are only open to people who are receiving such public benefits, and people who have a certain amount of assets won’t qualify. Properly drafted, special needs trusts can help beneficiaries retain their eligibility for these benefits. The trustee can distribute funds, as necessary. Ultimately, the governments providing these services may be repaid from the trust, but at least the disabled person will be cared for.
