If you help care for a loved one with special needs and worry about their future, planning ahead is essential. You should have a thorough understanding of the different options on the table, especially when it comes to their financial well-being. In fact, creating a special needs trust for your disabled loved one could serve as a lifeline later on.
Whether you are the parent of a child with special needs, worry about someone else in your family or want to create a trust for yourself, it is crucial to take a look at the advantages of special needs trusts.
Special needs trusts can safeguard benefits
In some instances, assets that disabled beneficiaries receive through trusts can interfere with their eligibility for government assistance. The Social Security Administration reports that special needs trusts do not reduce SSI benefits, while assets from other types of trusts could cause a disabled individual’s benefits to decrease.
Assets in special needs trusts do not count as resources, and this can allow disabled people to remain eligible for SSI benefits. In addition, special needs trusts can protect a disabled beneficiary’s Medicaid eligibility.
Other reasons to create a special needs trust
Aside from retaining eligibility for important programs, a special needs trust could give a disabled beneficiary and his or her loved ones peace of mind. These trusts help eliminate uncertainty and protect assets. If you are thinking about setting up a special needs trust, it is crucial to have a thorough understanding of the steps you need to take.