Military Offers Resources for Families of Children with Special Needs
When it comes to child care the military generally tries to help families with special needs in a variety of ways.Read more
When people with special needs receive money in their own names, or if someone with resources suddenly becomes disabled through an injury or illness, they may be unable to qualify for means-tested government benefits like Supplemental Security Income (SSI) or Medicaid because they have too much money. Fortunately, people under age 65 who face these unexpected challenges can typically transfer their excess assets into a unique kind of special needs trust, called a first-party or (d)(4)(A) trust, and remain eligible for most kinds of government benefits. Of course, first-party trusts are not perfect planning tools because the trust must contain a provision that allows the government to reclaim the cost of any benefits paid to the trust's beneficiary when the beneficiary passes away. (For a primer on first-party special needs trusts, click here. ) Although adults with special needs can now create their own first-party special needs trust thanks to federal legislation signed into law at the end of 2016, parents, grandparents, guardians, or the court must create the trust instrument for a minor.
Because a court-created first-party special needs trust can take months to establish, parents and grandparents of minors with special needs have a unique opportunity to make life much easier for their children or grandchildren by creating a first-party special needs trust while they are still living. Having a first-party special needs trust in place, even if it is not needed when it is initially created, ensures that a beneficiary who does receive a financial windfall in the future can immediately transfer his assets into the trust, avoiding months-long delays and accompanying loss of vital government benefits.
If you are a parent or grandparent of a child with special needs, you should strongly consider establishing this life-long and potentially life-saving trust today. Talk to your special needs planner to see if a first-party special needs trust would be appropriate for your family.