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In almost all cases where a parent will leave funds at death to a child with special needs, this should be done in the form of a trust. Trusts set up for the care of a child with special needs generally are called "supplemental" or "special" needs trusts.
Money should not go outright to the child, both because he or she may not be able to manage it properly and because receiving the funds directly may cause the child to lose public benefits, such as Supplemental Security Income (SSI) and Medicaid. Often, these programs also serve as the entry point for receiving vital community support services. In the case of SSI, at the end of 1999 Congress enacted laws making it much more difficult to create a trust for a disabled individual after she has received an inheritance, making it even more important that the parents create the trust as part of their estate plan.