Leaving behind an inheritance is usually an important aspect of creating an estate plan. For parents with children who have special needs, the focus might shift away from an inheritance and toward finding a way to provide long-lasting financial support. Most Lake Charles parents can accomplish this through a careful approach to estate planning.
Many — although not all — adults living with special needs receive government benefits. These benefits can provide anything from housing to a supplemental income to medical care. If these adults receive a large lump sum from their parent’s estate, benefits that have an income threshold will be discontinued, leaving individuals with no choice but to exhaust their new financial resources until their income level once again meets the requirement for benefits.
A special needs trust addresses this issue. Money from this trust is not counted as income, and a trustee can help manage it for the child’s benefit. This way adults with special needs can continue to receive their benefits while also having access to money for extras, such as movie tickets or other forms of entertainment that many people might otherwise take for granted.
However, some parents might have the financial means to provide for their adult children without the help of government benefits. In such cases, a special needs trust might not be the best option. Instead, a discretionary trust pays out both an income and principal to cover all of a person’s living expenses and more.
There is no such thing as a one-size-fits-all approach to estate planning. This is especially true for parents in Lake Charles who have children with special needs. Since ensuring a child’s continued financial support throughout their life, parents can consider speaking with an attorney who has experience in dealing with these types of situations and trusts.