A family member with special needs may always depend on their parents, siblings or other relatives to help them manage the obligations of daily life. Someone who is medically fragile or who has developmental disabilities may not ever be able to work a job and support themselves.
Family members may feel the pressure of needing to provide for someone even after they die. If you have someone that you love with a medical condition that makes them dependent on you for the obligations of daily life, then creating a special needs trust could benefit them and also give you peace of mind about what will happen to them in the future and after you die.
What are some of the benefits of a special needs trust?
Your loved one can still receive state aid
A special needs trust can help ensure someone continues to qualify for different government support programs. For example, qualifying for Medicaid requires that someone have both limited personal assets and limited income.
If your loved one were to receive a large inheritance when you die, they could be subject to penalties that make them ineligible for benefits or force them to pay out-of-pocket for basic needs that would otherwise have public schools government insurance program. A special needs trust funded by someone else will not prevent someone from qualifying for Medicaid in Louisiana.
A trust limits the risk of someone wasting their inheritance
Any beneficiary could spend their inheritance on silly or frivolous things, but someone with special needs may be more likely to make mistakes in managing inherited assets than other people. By creating rules about the use of the assets in the trust, you can prevent someone from wasting their inheritance or withdrawing so much from the trust at once that they make themselves ineligible for benefits.
A trust lets you name someone to support your loved one
Money alone will do little to make life easier for someone with special needs. What they truly need is outside support from someone that they can trust. When you choose the right person as trustee, you create a relationship that can help support your loved one long after you die.