Estate planning is important for everyone in California, but it’s particularly vital for the parents of children with special needs. Parents want to provide them with the best quality of life, but they don’t want to disqualify them from need-based government programs. Special Needs Trusts, or SNTs, can help with this dilemma.
The basics of SNTs
Special Needs Trusts offer a great way to provide for family members with disabilities. The funds in the SNT are administered by trustees, not by the beneficiary. This way, the trust protects assets from creditors. They’re exclusively reserved for the use of the person with special needs.
Using an SNT as an estate planning instrument has many benefits. First, it protects funds and sets them aside for a specific use. Secondly, an SNT can provide someone with comforts they might not otherwise be able to access. For example, the money in an SNT may be used to pay for activities for people with special needs. They can even be used to help them acquire and care for a pet.
Most Americans with special needs rely on government-backed disability programs. However, these have income limits. An SNT allows people to have some additional quality of life without excluding them from Social Security disability programs. Leaving them money in a will, on the other hand, could adversely affect their finances.
Anyone who wants to provide for someone with special needs should consider consulting with an experienced attorney during the estate planning process. A lawyer could explain the ins and outs of SNTs and when they’re appropriate. They can also suggest other ways of effectively structuring their client’s estate.