When you have a child with special needs, you may have to plan for a future where you will not be there. According to CNBC, you may need to consider a special needs trust.
The following can help guide you on how to establish a special needs trust.
Create a team for the trust
When it comes to a special needs trust, you have to pay attention to the different rules and regulations. To ensure that you abide by strict rules, consider a trust team. When it comes to your child’s needs, you need to keep in mind his or her current and future state of mind. How much input can he or she have over the finances? In addition, the team can track family assets, insurance policies and whether the trust will help.
Decide how much to put into the trust
There are two different types of special needs trust. A first-party special needs trust may help those who accumulated assets before becoming disabled or those who receive assets following Medicaid or SSI qualification.
The most common special needs trust applies to special needs children. You could set up a third-party trust for your child to benefit them if something happened to you.
When deciding how much to put into a trust, you need to think about disability and care. Some people only require tens of thousands of dollars, whereas others may need millions. You can fund the trust through your family assets, life insurance policies and more.
When it comes to your special needs trust, keep in mind that disabled individuals can only have $2,000 in assets to continue to qualify for Medicaid and SSI. The trust allows them access to assets that do not technically belong to them.