June 16, 2010

Special Needs Trusts for Children and Adults With Disabilities

I have been working on an article about Special Needs Trusts for a local newsletter and am posting it here for the benefit of the readers of this blog. Although I typically do not discuss my being an attorney on Chase's blog, I felt like this information was important enough to share since so many of the reader of this blog have a child with a disability. If you are in Georgia or North Carolina and are interested in hearing more, please feel free to contact me for additional information.

Special Needs Trusts for Children and Adults With Disabilities
By: Meredith Hilton, June, 2010

Having a child with special needs requires extra planning when it comes to protecting the financial stability of your loved one’s future.

If an individual with a disability has more than $2,000 to his name, he may become ineligible for SSI or Medicaid. Families with a child with a disability need to have a Special Needs Trust in place, as well as estate planning documents which take that trust into account, to accommodate this financial requirement and ensure that your child remains able to receive government benefits. Making a gift directly to your child without a Special Needs Trust can preclude his eligibility and put a stumbling block in his or her financial future.

Special Needs Trusts.

One permissible way to overcome the requirement that your child with a disability own less than $2,000 of cash and property (excepting allowable assets) is to establish a Special Needs Trust for your child. Such a trust allows a trustee (often a parent) to monitor and take care of funds placed in this type of discretionary, supplemental trust. It allows money provided by family members to supplement the governmental benefits such as Medicaid and SSI by paying for services or items that Medicaid would not cover. With a trustee managing the trust and overseeing your child’s financial needs, you can be assured that your child will be taken care of financially, even after your lifetime.

How to Know if Your Child Requires Special Needs Planning.
  • Does your child have a physical disability or cognitive impairment which will require assistance either now or in the future? 
  • Does your child participate in an early intervention program or special education? 
  • Will your child be able to financially support himself or make meaningful life decisions independently? 
  • Does your child receive SSI or Medicaid? 
  • Will your child be able to live independently or maintain employment when he reaches adulthood? 
How to Set Up a Special Needs Trust for Your Child.

An attorney who works with special needs trusts and estate planning can set up your child's Special Needs Trust. At the same time, you will need to update your will to accommodate the trust and prevent direct distributions to your child with a disability. As the parent, you can decide to act as the trustee and manage the trust for your child. Your attorney will give you advice on what types of distributions from the trust are permitted by Medicaid and SSI regulations. By abiding by these rules, your child will have all the advantages of the financial resources that you and your extended family have set aside for his or her future, and yet still maintain eligibility for government benefits. Taking these steps are essential for families with a child with a disability.


Meredith Hilton is an estate planning attorney for her firm, Meredith Hilton, Attorney at Law, LLC. She is licensed in Georgia and North Carolina and focuses on estate planning and special needs trusts. Meredith lives in Atlanta, Georgia with her husband and two sons, one of whom has special needs.

All information contained in this article is copyrighted and may not be used without the author's explicit permission.

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