People in New York who have special needs children may be unsure of the options available to make sure the children are provided for if the parents should die. Special needs trusts are designed for this purpose and can be set up along with the drafting of wills and other estate planning documents. There are two types of special needs trusts -- one is funded with the beneficiary's own assets, and the other is funded by a parent or other third party.
A self-settled special needs trust is often established when the special needs person is awarded a settlement for injuries that result from a civil lawsuit dealing with the cause of the disability. The trust is typically managed by a trustee and can be used as a supplement to assistance programs such as Medicaid and Supplemental Security Income (SSI). It may also be used for rehabilitation, necessary electronic equipment and more. Any services provided by the government must be paid back with any funds remaining in the trust if the beneficiary dies.
A third-party special needs trust is the ideal way for a parent to leave a special needs child his or her inheritance without causing government assistance programs to stop -- which will be what happens if it is left as a straight inheritance. Leaving it in a special needs trust will prevent the beneficiary from having to pay 100 percent of medicines, medical care, therapy, personal care and more. If it is not in a trust, the special needs person will be able to reapply for government assistance once the inheritance fund is exhausted.
It is only natural to be unsure about the procedures to establish wills and a special needs trust along with other estate planning. There is no need to cope with this process without professional assistance. An experienced New York estate planning attorney can provide guidance and support every step of the way.
Source: thebalance.com, "Special Needs Trust Options", Patti Spencer, Sept. 15, 2017