As the parent of a special needs child you undoubtedly worry about your child’s future. Whether your child is five, or 35, your concerns are likely the same. Specifically, you probably worry about your child’s care after you are no longer here to care for your child, both physically and financially. The good news is that there are a number of government assistance programs, such as Supplemental Security Income, or SSI, and Medicaid that can provide a wide range of assistance and care for your child throughout his or her life, even after you are gone. Care must be taken, however, to ensure that your child remains eligible for these programs. Often, a special needs trust in Geneseo Illinois is needed to make sure that your child does not lose his or her eligibility due to exceeding the income and/or asset limits.
Most federal benefit programs are means based programs. A means based program requires a recipient to meet income and asset limits to be eligible. If your child has too much income or owns valuable assets eligibility for these programs could be threatened. As a parent though you likely want to contribute financially to your child’s well-being as well. While you are here you can usually do this without threatening your child’s eligibility because your contributions are your own income/assets, not those of your child. You can even continue to contribute after your death by creating a third party special needs trust. What happens though if your child comes into assets or cash in his or her own name? Again, this could threaten benefit eligibility but can also be resolved by the creation of a first party special needs trust.
A special needs trust in Geneseo Illinois is a very specific type of trust that results in a special needs individual being able to retain eligibility for much needed benefit programs while still providing supplemental care and benefits above and beyond those provided by assistance programs. A third party special needs trust is funded by a third party, such as a parent and allows you to leave assets that can be used to supplement your child’s care after you are gone. A first party special needs trust, on the other hand, is funded by assets owned by the special needs person.
Typically, a first party special needs trust is needed when a well-meaning loved one leaves assets directly to a special needs individual in a Last Will and Testament. Other situations where your child could end up owning assets include the proceeds from a personal injury lawsuit, a divorce settlement, retirement benefits, or proceeds from a life insurance policy. To prevent these assets from disqualifying your special needs child from benefit programs, talk to your estate planning attorney in Geneseo Illinois about creating a first party special needs trust.
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