Protect your child’s benefits while planning for the future

Under the best of circumstances, estate planning for the future can be daunting. I remember as a young parent putting it off at every turn. My children were so young then. Surely I had plenty of time to prepare for their future. But you never know what the future holds and as parents, it was our obligation to make sure that our children were taken care of properly.

I was recently introduced to something called special needs trusts. I had briefly heard about the from several families whose children have special needs. Did you know that if your child has more than $2,000 in their name, they become ineligible for Medicaid, Supplemental Security Income and other public benefits? That can be a devastating prospect.

To learn more, I sat down with attorney Kirsten Izatt of The Estate Planning Law Group in Wheaton, which specializes in special needs trusts. According to Izatt, the goal of a such a trust is to allow you to receive the maximum benefits your child is eligible for while giving you the ability to save money for your child’s future. If you have a child who is receiving government benefits and whose disability will require long-term medical care, a special needs trust can protect those benefits.

While there is a lot to learn about setting up a special needs trust, there are just two things you need to know to get you on the right track. First, begin the conversation with a professional. This will allow you to get the facts and learn about your options from a reliable source while making sure that your trust is customized to your child’s particular needs and your unique financial situation. They will talk to you about “payback” provisions, how to handle inheritances, how to keep your financial records private, and how to make sure that the benefits your child receives from the government are not jeopardized.

Second, begin planning sooner rather than later. The sooner it is in place, the better you can make the trust work for your entire family. As you save for the future financial needs of your child you will have a better understanding of where and how to protect and grow those savings. When set up properly, special needs trust monies can be used for medical, social or residential needs over a lifetime.

A special needs trust also provides an avenue for friends and family members to contribute financial assistance. For instance, family members can make gifts to the trust and include your child (through the trust) in their estate planning. Remember, you have that $2,000 ceiling on personal funds to watch before becoming ineligible for benefits. The money in the trust does not count toward that $2,000 limit.

As parents of children with or without special needs, we create a network of professionals that we trust and rely on to give us information, guidance and ongoing support. They include doctors, ministers and financial advisers, among others. But do we include a legal professional that can provide that same ongoing support as our legal needs change? Perhaps it depends on the nature of the needs. The more complicated a financial situation becomes, the more likely that a legal professional is a part of that network.

When it comes to managing the future financial needs of someone with a disability, it can quickly become complicated. To make setting up an special needs trust easier to understand, The Estate Planning Law Group has a packet of information to answer many of the questions that you might have before you begin planning for your child’s future. If you would like to learn more, you can request the group’s free Special Needs Freedom Guide at SpecialNeedsFreedomGuide.com.

I invite you to share your thoughts on this topic as well as others at our blog at wdsra.com. Parents are encouraged to speak directly to other parents, share thoughts, offer personal stories, and educate each other on topics that affect them in their everyday life.

Ÿ Sherry Manschot is the marketing/public relations manager at Western DuPage Special Recreation Association. She leads a parent network of special needs families at WDSRA. Manschot can be contacted at sherrym@wdsra.com. More information about WDSRA can be found at wdsra.com.