For many parents in Odessa, trying to plan for a death can be difficult. Most parents may not think about what will happen to their children if they die, especially when they are young and healthy. Unfortunately, many Texans realize that an accident can happen at any point and strong estate planning is crucial to ensure one’s money is passed on to the right individuals. For the parents of special needs children, however, it is even more important to use the proper estate planning techniques so as to not interfere with federal disability benefits.
Setting up a third-party special needs trust can be a complex way to provide for special needs children after their parents’ death, but it is also an extremely effective way of protecting those children. These trusts will generally not prevent a special needs child from receiving Supplemental Security Income or Medicaid benefits, as the beneficiary does not own the funds, he or she merely receives monetary payments.
Setting these trusts up, however, require a detailed understanding of Texas estate planning law and usually require the assistance of a trust lawyer. Even if parents are familiar with the law, even the slightest error could prevent a child from receiving the money left to him or her, or could seriously change what sorts of state and federal benefits the child is able to receive.
Another benefit of a special needs trust is that the child is not responsible for managing the money and the parents can put specific restrictions on how the money is to be used. It will then be up to a trustee to ensure the terms of the trust are followed.
Source:The Fiscal Times, “Estate Planning Guide for a Special Needs Child,” Sonya Stinson, July 10, 2013