Some people come into this world with congenital conditions that will make them forever dependent on the care of others. There are many other people who acquire disabling medical conditions because of an injury or an illness that occurs later in life. In either event, people with medical issues that significantly limit their cognitive or physical abilities often live very different lives from those unencumbered by such challenges.
Those who have a loved one with a serious medical condition may feel responsible for their care and comfort. And this responsibility and/or desire to help is not limited to their lifespan. One of the many ways that parents and other family members can meet the needs of those with life-altering medical conditions while they remain available to help and/or when they’re gone is through the creation of a special needs trust.
Like any other trust, a special needs trust sets aside assets for an individual’s benefit and imposes certain limitations on the use of those assets. Special needs trusts are unique because they are only an option when someone has a health concern that limits their independence. They provide two important forms of protection for individuals with special needs.
Protection from the loss of benefits
Individuals with disabling medical conditions often rely on state insurance programs or even housing stipends to help them live as independently as possible. They could be at risk of losing those benefits after the death of a loved one because of a lump-sum inheritance. A special needs trust can limit how much someone receives at one time to help preserve their access to crucial state benefits.
Reduced risk of financial abuse
It is unfortunately quite common for unscrupulous individuals to target those that they view as vulnerable or easy to manipulate. Someone with special needs who inherits a significant amount of money or owns their own home could end up the victim of financial manipulation and abuse. A special needs trust creates a layer of protection against that kind of financial misconduct by limiting the scenarios in which someone can access trust resources and requiring a trustee to manage and distribute trust assets.
Those who want to leave resources for a loved one with special needs will want to ensure that their legacy has a positive impact on that individual. Taking the time to put together and fund a special needs trust can provide valuable long-term protection for those who are vulnerable because of their medical realities.