If you have a special needs child, it’s especially important to think of his or her future after you’re gone. You want to ensure that your child is taken care of. Setting up a special needs trust is one way to do that. This trust will provide money to take care of your child and also protect against financial abuse. Here are several important steps to follow.
Determine How Much Money to Put in the Trust
The first thing you have to do is decide how much money you want to leave in the special needs fund. How much you should leave will depend on several factors, like what kind of disability your child has and the level of care he or she requires. The trust can be funded by inheritances, family assets and even life insurance policies. If you’re not sure exactly how much to leave your child, speak to a financial planner who specializes in special needs.
Decide on the Type of Trust
There are different types of special needs trusts. First-party special needs trusts, for example, can be created by adults who accumulate assets before they develop a disability. Third-party trusts are set up by families to benefit children and are the most common type of special needs funds.
However, if you have limited financial resources, setting up a pool-asset trust may be ideal. It combines assets of several beneficiaries into a larger portfolio.
Select a Trustee
The trustee of a special needs trust is responsible for managing and investing the funds for the trust and making disbursements that only benefit the beneficiary. That’s why it’s important to be extra selective when choosing a trustee. The trustee you appoint should be responsible, trustworthy, organized and honest. Additionally, be sure to talk to the person you want to appoint as trustee beforehand. It’s a big responsibility and you want to make sure he or she is up for it.
Hire an Estate Planning Lawyer
Setting up a special needs trust can involve many complexities, so you don’t want to handle it on your own. It’s in your best interest to work with an experienced estate planning lawyer. He or she can assess your needs and help you establish a valid special needs trust. Your lawyer will address all your questions and concerns and never leave you in the dark.
If you’re considering creating a trust for your special needs child, you schedule a free consultation with a reputable estate planning lawyer, like a probate lawyer in Folsom, CA, as soon as possible.
Thank you to Yee Law Group, PC for their insight into creating a trust.