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Protecting Your Special Needs Child After Your Death

A recent study shows that in 2011, 5.1 percent of American children between the ages of 5 and 15 were identified as disabled. That amounts to more than 2.3 million children with special needs. The study also shows that only 20.7 percent of working-age adults with disabilities had a full-time job that year, compared to 55.5 percent of the rest of the population. The median income of disabled adults was $36,700, approximately $6,000 per year less than their nondisabled counterparts.

These statistics confirm that it is more important than ever to protect your child’s assets and governmental benefits in the event of your death.

Types of special needs trusts

Below are the typical special needs trusts that estate planning attorneys prepare:

  • A testamentary special needs trust is part of a will or revocable living trust that takes effect after the death of the person making the gift.
  • A self-settled special needs trust is funded by a court settlement or award from a birth injury or accident and takes effect immediately after it is established.

For those unable to afford a special needs trust, some nonprofit organizations offer pooled trusts that manage funds on behalf of numerous people with disabilities.

How special needs trusts work

When a person with a disability has sufficient funds for care, SSI and Medicaid payments are cut off until those funds are exhausted. Depending on the amounts involved, many years of governmental support may be withheld. After private funds are exhausted, the government aid is restored, but it is usually insufficient to meet all the needs of a person with a disability.

A special needs trust is drafted to provide its funds are not owned by the beneficiary. The trust funds are designated to supplement, not replace, government benefits. In this way, SSI and Medicaid payments are not affected.

If you are looking for creative ways to ensure that your child receives the best care and lives the most comfortable and supported life possible, contact the compassionate and experienced trust attorneys at Armstrong & Lamberti, PLLC .

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