Special needs trusts are trusts that can be set up by the parents of children in Florida who are mentally or physically disabled. These trusts can ensure financial security without putting the child’s eligibility for government benefits in jeopardy. The trust supplements Social Security benefits and Medicaid, but parents should understand just how these trusts work and, even more importantly, how to fund them.
When parents set up a special needs trust, they must choose a reliable trustee, who willadminister the trust and will manage the money in an honest manner. For parents who are still alive, the trustee provides trust money to the child without the loss of government aid eligibility. After the parent’s death, the trustee will continue to distribute money from the decedent’s estate in a manner previously established.
It can be difficult providing funding for any type of trust, but there are ways that any parent can establish a special needs trust in a financially prudent manner. One way a parent can do this is to specify the use of life insurance policy proceeds to fund it. Another benefit of this type of trust is that family and friends can also contribute to it. These methods can ensure a child with special needs remains financially stable.
If a parent outright gives money or property to their child, those assets can disqualify that child from receiving the government assistance that is needed. Some parents may learn this too late. If the wrong trustee is chosen or another mistake occurs, the child could end up having to fight for needed medical and financial benefits. An attorney with experience in trust administration matters can guide a client through the process.
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