Nevada parents with special needs children may be interested in a type of trust that enables them to save for the child’s future without interfering with the governmental benefits the child may receive. This peace of mind extends to other family members so they can contribute to the trust fund whenever they are able to do so.
After the supplemental care trust or special needs trust is set up, a trustee is chosen. This person is an individual who will oversee the trust to ensure the funds are distributed to the child or adult in a way that is most beneficial and in accordance with the parent’s wishes. The trust may be operational while the parents are alive or when they pass away. To set up a special needs trust, it is advisable to consult with an attorney. The structure of the trust is important, and an attorney may offer insightful advice as well as help delineate the duties and limitations a trustee may have.
The way the trust is funded is an individual decision, but some parents choose to earmark life insurance policies to be placed in the trust after their demise. Retirement accounts, real estate and social security and military benefits for survivors of the deceased may also be added.
The funds in a special needs trust may not be used for day-to-day living expenses for the child or to pay property tax. It may be used for education, home health aides, rehabilitation and other uses. The use of some funds is governed by state specific restrictions. It is important to be aware of restrictions imposed by Medicaid and SSDI when placing assets into the trust. An estate planning attorney may offer individualized advice concerning the best way to establish a special needs trust and how to fund it.
Source: Pacer.org, “The Special Needs Trust“, October 13, 2014