Establishing Trust Funds for Special Needs Children in Illinois

special needs children, Illinois Special Needs Trust AttorneySpecial needs children often require expensive care and treatment, and parents may worry about who will care for their children in the event of an untimely death. Parents may even seek counsel from estate planning attorneys to determine their options and gain information regarding trusts for their children with special needs.

Special Needs Trusts — The Basics

Special needs trusts are established so that parents with special needs children can put money aside to be used for a child's care at a later date. Any funds in the trust are protected and will not impact the amount of money a disabled child or person receives from other sources such social security. Even though there may be thousands of dollars in a trust fund, the individual will still retain all rights to Medicaid for health insurance benefits.

Special Needs Trusts — Financial Security

If a trust fund is not set up in the name of a special needs individual, any monies that person receives can impact social security and Medicaid eligibility. In Illinois, a disabled person cannot have an income more than three times over the poverty level, or receive more than $2,000, and still receive supplemental security income or government health benefits. Once access to these resources has been cut off, an individual would have to re-apply to all programs and prove that he or she has no additional financial resources, therefore causing potential financial hardship. This problem can be eliminated by having a special needs trust fund set up in the individual's name.

Special Needs Trusts — Provisions

Individuals who are guardians of a child or children with special needs should consider making provisions for a supplemental needs trust in their wills. This will entitle a special needs individual to adequate financial provision upon the death of his or her caretaker. There are also options for setting up and paying into a special needs trust while a guardian is still living. If done properly, this will not affect a disabled individual's eligibility for government assistance.

A third option is to set up a special needs trust to hold significant amounts of money granted to the special needs child—inheritance paid out from the death of another relative, for example. This money can go into a trust that has been certified by a public court to ensure the special needs individual will still qualify for his or her other benefits.

For more information about how to establish a special needs trust for your child, please contact a DuPage County special needs trust attorney today to schedule a consultation. We are proud to be of service to Illinois families and we look forward to working with you.

Estate Planning for Parents with Special Needs Children

DuPage County estate planning attorney, estate planning for parents, first-party trust, special needs children, third-party trustEstate planning can be confusing with all the rules and laws to consider. But if you are a parent of a special needs child, estate planning can be even more complicated because of the worry over who will look out for your special needs adult child when you are gone. Also, the cost of care for a special needs child can be astronomical. For example, a study done by the University of Pennsylvania and the Children's Hospital of Philadelphia concluded that the lifetime cost for a person with autism that involves an intellectual disability is $2.4 million.

There are special considerations a parent has to address when estate planning. An adult child who receives Supplemental Security Income (SSI) and Medicaid benefits has a limit on the amount of financial resources they can have. Currently, a person on SSI cannot have more than $2,000 in liquid assets. The limits for Medicaid depends on the state in which the child lives.

However, parents can set up special trusts which will ensure the child will be taken care of, yet will not interfere with any benefits they receive. One type a parent can consider is called a testamentary trust and is often referred to as a third-party trust. This is a trust that is set up for the future, but does not have current funding.

Another option is a first-party trust. This is a trust that is set up using the special needs child's own funds, such as a gift or inheritance. One of the major differences between a third-party trust and a first-party trust is that upon the death of the special needs child, any money that is left in a first-party trust goes directly to the government for reimbursement of Medicaid expenses. With a third-party trust, there is no government payback and the person who originally set up the trust decides where the leftover funds go.

Estate planning for parents with special needs children can be complicated. However, an experienced DuPage County estate planning attorney can help guide you through the process to ensure your child will be taken care of in the event of your death. Call us today.