For most parents, the job of raising a child ends when the child turns 18.
When your child has special needs, however, your caregiving role lasts a lifetime.
These parents face the dilemma of how to provide for their children with special needs beyond their own lifetimes. Autism Speaks recently estimated the lifetime cost of care for a person with autism or an intellectual disability between $1.4 million and $2.4 million.
Many children with special needs rely on Supplemental Security Income (SSI) and Medicaid, government programs with severe asset restrictions. SSI provides for the bare necessities of food, shelter and clothing and Medicaid is often the only health insurance that will cover a child with special needs.
However, these programs do not cover all of the costs associated with caring for a child with special needs. A child may need extra income to pay for out-of-pocket medical and dental expenses, transportation costs or a personal care attendant.
Because of the asset restrictions associated with SSI and Medicaid, parents of children with special needs cannot simply bequeath their assets or money to their children when they die. However, the government has established rules allowing assets to be held in a trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and Medicaid, as long as certain requirements are met.
An attorney who focuses in special needs planning can help you set up a Special Needs Trust to supplement your loved one’s public benefits and enhance their quality of life while preserving their government benefit eligibility.
Generally, Special Needs Trusts are either stand-alone trusts funded with a separate asset such as a life insurance policy or can be a sub-trust in your living trust. Parents should be aware that funds from the trust cannot be distributed directly to the beneficiary. Instead, funds must be disbursed to third parties who provide goods and services to the beneficiary.
The Special Needs Trust can be used for a variety of life-enhancing expenditures such as:
• Annual check-ups at an independent medical facility
• Attendance at religious services
• Supplemental education and tutoring
• Out-of-pocket medical and dental expenses (not otherwise covered by available benefits)
• Transportation (including purchase of a vehicle)
• Maintenance of vehicles
• Purchase materials for a hobby or recreation activity
• Funds for trips or vacations
• Funds for entertainment such as movies, shows or ballgames
• Purchase of goods and services that add pleasure and quality to life: computers, videos, furniture, or electronics
• Athletic training or competitions
• Special dietary needs
• Personal care attendant or escort
Once you create a Special Needs Trust, you can rest assured that should something happen to you, your children will still receive the support they need to live comfortably.
To find a competent special needs attorney in your area, visit the National Academy of Elder Law Attorneys’ (NAELA) website at www.naela.org.