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5 things families should know about special needs trusts

Special needs trusts (SNT) are helpful tools for families who have children with physical or mental disabilities. However helpful they may be, it is still important to understand how they work and how they help your child. Here are five essential things to know about SNTs.

1. Trusts are built to be specific

As an estate planning tool, trusts are designed to be specific and detailed. There are many kinds of SNTs, but you have the power to cater the trust to provide for your child's unique needs and care. 

2. The wording of the trust is important

It is critical to word all estate planning documents carefully. For example, SNTs must state that it only provides your child "supplemental and extra care." This specific wording allows you to support your child, but also sustains their eligibility for government benefits. An experienced estate planning attorney can help you craft your SNT to protect your child's rights and your wishes.

3. Your child can still receive benefits with SNTs

If your child inherits assets or property through your will, they may no longer be eligible for benefits. Benefits such as Medicaid or Supplemental Security Income (SSI) only apply if the beneficiary has a low enough income. If your child suddenly inherits financial assets from you, they may not qualify.

A trust holds your property, so technically your child will not own any assets while they are still in the SNT. That is how they can qualify for the benefits they need, while you still provide for them.

4. You should choose your trustee wisely

All trusts must indicate someone as the trustee. The trustee is the agent in charge of administering the assets and wishes outlined in the trust. 

It is always important to choose a reliable and trustworthy person to be a trustee, but it is even more important for an SNT. This trust is meant to benefit your child, and you want to make sure that they are in good hands.

5. You can protect your child with SNTs

Every child is legally an adult when they turn 18. Once they are 18, they are emancipated and no longer in their parents' legal custody. However, as the parent of an adult with special needs, you may want to continue to act as their guardian and primary caregiver.

A trust and a guardianship can help. They allow you to protect your child's rights and help them with medical and financial decisions even throughout their adulthood.

Your child is unique and needs unique care. An SNT can help ensure they receive the support they need, no matter what.

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