A special needs trust offers peace of mind for parents, loved ones
A friend of ours recently related a story about her mother and her grandmother. After her grandfather died, her grandmother moved in with her parents. Her mother went out to play cards with friends one night and came home to find her mother standing at the top of the stairs, hands on hips and steam coming from her ears. "Where have you been?" her grandmother demanded. "Do you know what time it is?"
Our friend's mother decided she had had enough of her mother's nagging. "Mother," she said, "I am 65 years old, and I can stay out as late as I want."
It's a true story, and it offers a couple of lessons. First, parents will always worry about their children. And second, children can't stop their parents from worrying about them.
Some children, however, cause a little more worry than others. Parents of a child with a disability or mental illness may wonder how their child will get along without them. One tool that many families use is a special needs trust.
When you establish a trust, you appoint a third party to manage real estate, assets, even a personal injury damage award for your own benefit or the benefit of someone else. You can do this at any time for just about any legal reason. A trust is an extremely flexible tool, a kind of made-to-order problem solver that may even have tax advantages.
A special needs trust is a type of trust that has been tailored to support a beneficiary who is incapable of supporting him- or herself. You can specify in the trust agreement that your beneficiary's housing and medical costs, daily expenses and any other financial obligations will be paid for by the trust. You can include a provision that your child have a steady supply of jelly beans or that your child live within five miles of a relative. Trusts are that malleable.
There are other important advantages, though, that we will discuss in our next post.
Source: Findlaw.com, "Special Needs Trusts FAQs," accessed Aug. 10, 2015