If you are a parent of a child with special needs in New York, you may worry about how they will live once you pass away. For many people in a similar position, setting up a special needs trust as part of the estate plan is the solution. At Marcus, Gould & Sussman, LLP, we have experience helping clients protect their loved ones with disabilities. Proper planning ensures they receive the care they need, long after the donor’s death.
According to The Legal Examiner, third-party trusts are financial instruments that protect beneficiaries from unnecessary expenses while ensuring they remain eligible for government benefits. There is a limit to the income and personal assets an individual can have and still qualify for Medicaid and Supplemental Security Income. If you leave your child a standard inheritance, they may no longer qualify for the benefits. A special needs trust offers an option.
Instead of placing money into a bank account, it goes into a trust. The products and services purchased using the money support the needs of the beneficiary. A trustee manages and disburses the funds. As long as the assets do not go directly to your child or overlap government benefits, they do not count when determining eligibility for SSI or Medicaid. There are several other benefits to a third-party trust:
- There is no limit to the amount placed in the trust
- The trust rarely needs court oversight
- There are no age limits
- The donor pays the income taxes
When the trust beneficiary dies, any remaining assets may pass to other relatives, regardless of whether they have special needs. Visit our webpage for more information about this topic.