Michael A. Manna & Associates
Toll Free: 866-678-0459
Phone: 201-345-3018
Toll Free: 866-678-0459
Phone: 201-345-3018

Let our attorneys provide the legal help Your Family Deserves

Case Evaluation Form

Disabled children benefit from special needs trusts, P.2

In our previous post, we began looking at the role special needs trusts can play in seeing to the financial well-being of disabled children once the parents are gone.

As we noted, such trusts can be useful for leaving funds, providing housing, and seeing to long-term care. The great benefit is that they will not hinder the child's ability to qualify for government benefits programs such as Medicaid or Social Security.

Seeing to the housing needs of disabled children can have multiple approaches. Families sometimes join together with another family with a disabled child and purchase a home together. Sometimes families set up and fund a trust for the purpose of making mortgage and tax payment, as well as seeing to maintenance costs. Sometimes parents set up a qualified personal residence trust, which allows them to live in the home before transferring it at a discounted market value to another family member who manages the property for the disabled child. Special needs trusts can hold housing for disabled children.

Long-term is another area where special needs trusts can be useful. Many parents with disabled children who are below 65 years of age will place money in a special needs trust in order to qualify for Medicaid for themselves. This is a valid approach, but care should be taken that no such transfers are made within five years of the Medicaid application. If they are, they will be counted against the parent in their application, and they may qualify for a lower payment.

Special needs trusts are quite versatile as an estate planning tool. Parents with disabled children do well to ask their attorney about how to use these types of strategies in their own estate plan.

Source: Wall Street Journal, "Taking Care of Disabled Heirs," Sep 3, 2011.

No Comments

Leave a comment
Comment Information