Why Would My Child With Autism Need a Special Needs Trust?
Question: I have heard of a Special Needs Trust. Can you share why my son with autism may need one?
A Special Needs Trust is an important element in special needs planning because of what it can protect. For most individuals with an intellectual and developmental disability, government benefits are critical to providing a very basic way of life; however, there are financial requirements to qualify for these benefits.
An individual must be nearly penniless to qualify, which leaves him/her unable to build assets in savings accounts or investment accounts— this is the dilemma that families face. Parents always want to provide for their child with autism, but they can’t do it in the same way they do for themselves or even the same way they do for their other children.
That is where the Special Needs Trust comes into play. A Special Needs Trust is a unique legal tool that, if designed correctly, can allow an individual with a disability to have assets available for his/her lifetime support needs while at the same time continuing eligibility for government benefits.
The Special Needs Trust is unique because it must be designed with very specific language for it to qualify as a Special Needs Trust. Qualification as a Special Needs Trust is critical because if it does not qualify, then Social Security will count the assets held inside the Special Needs Trust as an asset of the individual with a disability, which will more than likely cause him/her to lose needs-based government benefits.
For so many individuals with autism, these government benefits are critical because they can provide a monthly income (usually less than $1,000) that helps pay bills, provide transportation, daily support to live independently, health insurance, job training, and more.
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A properly drafted Special Needs Trust is not owned by the individual with the diagnosis; he/she is simply the beneficiary. When an account is opened in the name of the trust, it is not opened with the individual’s social security number, but instead has its own EIN or Tax ID #.
Since the individual with a disability does not have any ownership in the trust and no decision-making ability of how to use the money, Social Security does not consider it a resource of that individual. In that way, a family can place any amount of money or real estate or any other asset inside this trust, and it will not have an impact on the individual’s government benefits.
Due to the intricacies of a Special Needs Trust and overall special needs planning, I do suggest you find professionals with the expertise necessary to design and build it correctly.
For more information on how to prepare for the future, be sure to contact a financial advisor who specializes in serving families with special needs. A Special Needs Plan is driven by their purpose of leading families to independence through an ongoing multi-generational plan. A Special Needs Plan is passionate about families confidently moving forward.
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This article was featured in Issue 89 – Solutions for Today and Tomorrow with ASD