Creating a special needs trust

New Jersey residents who are creating an estate plan may want to consider setting up a special needs trust for a disabled child who will need care. With a properly-created and administered special needs trust, eligibility for certain government benefits such as Medicaid and SSI remains unaffected. The trust can pay for many things that are not covered by those benefits including enrichment activities, glasses, caregivers, haircuts and visits to family members.

However, it is critical that the trust be set up correctly so that it does not impact those benefit payments. The payments must go directly to providers and not to the individual on whose behalf the trust exists. Furthermore, people who are considering setting up such a trust should keep the age of the beneficiary in mind. Some parents wait until their child is above the age of 18 to set one up. This is because there may be more school-based and community programs for children. At this point, parents are also likely to have a better sense of their child's needs.

Special needs trust are not only for the wealthy, and there may be a number of ways to fund such a trust such as using life insurance. Another important decision will be who to appoint as trustee. This will need to be someone who can be trusted to take care of the beneficiary.

An attorney can assist parents in establishing a special needs trust as well as on developing strategies for funding the trust. The attorney might also be able to help in other aspects of estate planning related to the child including a guardianship should the parents predecease the minor child.

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