Parents raising a child with special needs often have more expected of them. Their child will usually require more attention on a daily basis and ongoing support for longer than other children.
It is not uncommon for adults with special needs to remain financially dependent on their parents. They may even live at home for as long as their parents survive.
If you worry about providing for your child with special needs, creating a special needs trust can be the right solution. A trust limits how your child can use their inheritance and protects them against potential negative consequences that an inheritance might have for them.
An inheritance could limit their benefits
Adults with special needs who live in residential communities or group homes often depend on a carefully curated set of government benefits to maintain their independence. They may not be able to work or may only be able to work in jobs that offer minimal pay.
Medicaid or Supplemental Security Income (SSI) could both be crucial to your child’s social safety net. A lump-sum inheritance could end their benefits the year they receive it as well as for some time afterward.
Your child may not know what to do with an inheritance
People who receive large sums of money that they did not work for can make very questionable decisions with those resources. They might go out and spend it all on entertainment, clothing or their favorite foods. It is surprisingly easy for people to spend thousands of dollars in just a few months if they don’t watch their habits carefully. They could also fall victim of people who just want access to their assets.
If no one is there to help monitor and manage the use of inherited assets, your child may not have an inheritance for long. A trust will give oversight in the form of a trustee who can make sure that those assets go toward their care and well-being and last as long as possible.
There could be other benefits to a special needs trust, including the peace of mind that your child or other dependent with special needs will still have support even if something happens to you.