Can a Special Needs Trust Benefit My Disabled Adult Child?

 Posted on July 22, 2022 in Estate Planning & Children

Parents of children with disabling special needs must navigate a complex array of Illinois laws to ensure their children are taken care of as part of their estate plan. In addition to managing the financial resources a family can provide for their disabled loved one, government assistance may also be available to support a disabled adult. A family that can set up the right special needs trust can maximize their options for providing a stable, reliable source of income for their loved one that combines available government support with family assets.

How Do Special Needs Trusts Work?

A special needs trust is part of an overall estate plan that allows parents of children with disabilities to give their child money while still allowing the child to receive government benefits like social security. There are three kinds of special needs trust that vary slightly in certain respects. They are:

• Self-Settled Special Needs Trust - This type of trust is available to an individual under age 65 whose personal resources exceed the maximum limits allowed for Medicaid eligibility. The Self-Settled Special Needs Trust will pay any remaining funds in the trust after the beneficiary’s death to reimburse the state for any Medicaid the beneficiary received.
• Third-Party Special Needs Trust - This type of trust is established and funded using the assets of the trust’s settlor. Any assets which are not used by the beneficiary will revert back to the settlor, rather than the government, upon the beneficiary’s death.
• Pooled Special Needs Trust - This type of trust must be managed by a nonprofit organization and can have funds that belong to many beneficiaries, which are pooled for investment and administrative purposes. Each individual has their own account and receives their share of the fund’s earnings.

Determining which type of trust makes sense for your loved one and your overall estate plan will depend on your assets, the beneficiary’s age and assets, and many other factors which an estate planning attorney can help you review.

Meet with a DuPage County Special Needs Trust Lawyer

Providing your disabled adult child with the financial support they need throughout their lives is an essential part of managing your overall financial picture. To learn more and to get help from a Wheaton, IL special needs trust attorney with experience in estate planning, call the offices of Stock, Carlson & Asso. LLC to schedule a confidential consultation. You can contact us at 630-665-2500 to set up a meeting over the phone or in person.

Source:

https://www.ilga.gov/legislation/ilcs/documents/076000030K1213.htm