Parents need to raise their children. This starts once the child is born. Early on in the child’s life the parents need to help them with almost everything. Over time the child will grow and learn how to do many things on their own and no longer need their parents for everything. Eventually children will become adults and while children will still rely on their parents for some things, they generally become independent and are able to provide for themselves.
This is not true for all children though. There are many children who have mental or physical impairments. They will become adults due to their age, but they may not be able to ever effectively provide for themselves. When they become adults they may receive various forms of government assistance to provide for their needs. In most situations though there are asset limitations and/or income limitations that the people need to stay below in order to qualify for the various benefits.
Generally, this will not be an issue for people who are unable to provide for themselves. This may become an issue though when the parents pass away and the child is entitled to an inheritance. The amount the child receives may put them over the asset limitations.
Basics of special needs trust
One way parents can still provide the inheritance to their children is through a special needs trust. This allows the inheritance to stay out of the ownership of the children. A trustee is in control of the assets and can provide for the child’s needs while still allowing the child to continue to receive their assistance.
There are many parents who have children with special needs. Some of these children will need assistance financially for the rest of their lives in addition to other care. It is important that they continue to receive these benefits after the parents pass away. For this reason, a special needs trust can be an important part of estate planning for parents with children with special needs. These trusts need to be drafted correctly though and consulting with an experienced attorney could be beneficial.