Providing Creative Solutions For Your Legal Needs

Estate Planning Faq i have a Special Needs Child Other Than a Basic Will is There Anything i Need to do to Provide for That Child

On Behalf of | Oct 9, 2023 | Firm News

Although each situation varies, and there are many factors to consider, you may want to set up a special needs trust to provide for your child. A special needs trust may be a useful tool for a disabled individual who is receiving, or will receive, government benefits.

The special needs trust allows money to be set aside for the disabled individual without jeopardizing his/her eligibility for government benefits. There are two basic types of special needs trusts: a first party special needs trust, and a third party special needs trust.

  • First Party Special Needs Trust: is used for the disabled individual who has already received a sum of money, usually through a lawsuit settlement or an inheritance. Those funds can be placed in the special needs trust in order to help the individual qualify for government benefits.
  • Third Party Special Needs Trust: is used when the trust will be funded with money from other people. The most common scenario is for parents (or other family members) of a disabled individual to fund the special needs trust through their own will or trust, although it can also be funded during the lifetime of the donor(s). Similar to a first party special needs trust, funds placed in a third party special needs trust do not disqualify the recipient from certain government benefits.