How Do I Know if Our Special Needs Trust is Adequate?

Determine if Special Needs Trust is right Sarah asks: “I had a special needs trust created by our family attorney years ago, and I am wondering if someone should review this document to make sure it was written right. I ask this because another mom in our parent support group who had a testamentary special needs trust had issues when the grandmother passed away and their child ended up losing benefits.”


Sarah, thank you for your question.  My quick answer is yes; unless your family attorney has a specialty practice that focuses in creating Special Needs Trusts.  The reason I lean in this direction is because working in the Special Needs Arena demands specific knowledge that is not only created by certifications but also by experience serving families.  If your family attorney has the education and experience to review the document he initially created for you then that is great, but if not it makes sense to find another professional for a second opinion.

It is very common that we find Special Needs Trusts initially set up as testamentary.  Testamentary simply means that the trust lives inside your will (another legal document that tells the court system who you would like to administer your wishes, how your assets are allocated to your heirs, and who you would like to care for your children, i.e. Guardian).  By having a Special Needs Trust be testamentary it limits its ability to “fully” function because it will not exist until after you die.  This can cause a problem when other family members (like grandparents) want to leave money for your child while you are still alive, because with a testamentary trust there is nowhere for them to put that money unless they give it directly to your child which can then cause a possible forfeit of government benefits.

In order to avoid issues, it may be best for you to consider an Inter Vivos special needs trust.  This simply means that the trust exists now.  It is alive on the day you sign the paperwork with the attorney.  This type of Special Needs Trust allows family members to contribute to your child’s future support needs while you are still alive.  It also allows you to begin planning more appropriately at the end of your life as to the funding and managing of your child’s Special Needs Trust.

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 what they call Unleash L.I.F.E.™- L.I.F.E. meaning Lasting Independence For Everyone™. This is accomplished with education, action, and support in the creation, implementation, and continued monitoring of a specifically designed lifelong and integrated plan for your family: parents, caregivers, your loved one with special needs and their siblings.

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This article was featured in Issue 45 – Protecting Your Child with Autism

Ryan Platt

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. 101 N. McDowell Street, Suite 120 Charlotte, NC 28204 704-326-7910 Website: F. Platt, MBA, ChFC, ChSNC, is a registered representative that offers securities, investment advisory, and financial planning through MML Investors Services, LLC, member of SIPC. A Special Needs Plan is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. This article is not a recommendation or an endorsement of any products. He is the founder of A Special Needs Plan.