July 26, 2012
When parents ponder how to provide for their child with special needs, they sometimes forget one of the key advantages of a special needs trust that is created while the parents are still alive: the trust can be the recipient not just of the obvious assets that are available for the child. Members of the extended family (grandparents, aunts, uncles, etc.) and friends can also make gifts to the trust or remember the trust as they plan their own estates.
In addition to the gifts and inheritances from other people who love the child, parents can leave their own assets to the trust in their will. They can also name the trust as a beneficiary of life insurance or retirement benefits. Parents might consider whether making the trust the beneficiary of a life insurance policy makes sense now, while they are still healthy and insurance rates are low.
An attorney whose practice focuses on helping families with children who have special needs can assist you in setting up a trust that can receive such gifts and ensuring the gifts are properly allocated so they do not jeopardize any public benefits the child may receive.