Trusts for Disabled Children
A straight inheritance could disqualify your disabled child for government benefits such as Social Security and Medicaid. By setting aside money in a special needs trust, you can still provide for your child while avoiding those eligibility and spend-down problems.
The estate planning attorneys of Stenger, Roberts, Davis & Diamond, can guide you through the steps for establishing and funding a special needs trust, also known as a supplemental needs trust. We can also explain other strategies for passing wealth to the next generation.
New York Special Needs Trust Attorneys
You have to be careful not to give away assets to relatives with certain disabilities because it could make them ineligible for government programs or require them to spend down the inheritance before qualifying. You also cannot directly provide a lump sum or monthly stipend to that child, niece/nephew, grandchild, etc., while they are receiving public assistance.
A special needs trust holds money outside of the disabled person's estate so that it is not counted as assets for Social Security or Medicaid eligibility.
- The trust cannot pay for essentials such as housing and food, but it can pay for travel, entertainment, household amenities and other quality of life "extras."
- The money can only be spent on behalf of the beneficiary, but the beneficiary cannot control or access the trust funds. Payments are authorized by the trustee, who could be the parents, another relative or a professional trust administrator.
Our attorneys can advise on important considerations such as mechanisms for funding the special needs trust. It can be self-funded, as from proceeds of the disabled person's personal injury settlement. It can also be funded by a third party (the parents or other benefactors) through a bequest in their will, through a life insurance policy purchased for that purpose or through gifts of money while the benefactor is still alive.
Peace of Mind That Your Child Will Be Cared For
Through a special needs trust, you can rest assured that your minor child with disabilities or adult disabled child will be protected and provided for even after you are gone. We assist families throughout the Hudson Valley, with offices in Wappingers Falls and Poughkeepsie. Contact us today to arrange a consultation with an experienced estate planning and trust administration lawyer.
Stephen Diamond is the contributing attorney to this content.