If you are the parent of a physically or mentally disabled child or a child with a chronic illness, you are likely concerned about the future. Along with worrying about your child’s medical conditions, emotional concerns, and general quality of life, you must also worry about how you will be able to afford the care your child needs.
The costs of caring for a healthy child can put a strain on a moderate-income family. The costs associated with caring for a child with special needs can send the average family into bankruptcy. More importantly, what happens when the child reaches the age of majority? While there are a number of government programs that can help pay for the care your child requires, most are income-dependent, meaning that if your child has access to other income sources, he or she may not qualify for assistance. This is where a special estate planning tool comes in — the Supplemental Needs Trust or SNT.
An SNT operates in much the same way as other trusts. You, as the child’s parent, can fund the trust with assets of your choice, appoint a trustee and designate your child as the beneficiary. When properly drafted, the benefit to an SNT is that the assets held by the trust will not prevent your child from qualifying for government assistance programs. The purpose of an SNT is to provide supplemental care over and above that which is provided by government programs.
An SNT must use very specific language in order to work as intended. Sit down with an experienced and qualified estate planning attorney when you are ready to create an SNT to be certain that the trust is created correctly so that your child will receive the maximum benefits possible.