Parents of special needs children have a number of additional considerations when it comes to estate planning. For many families, children with special needs continue to depend on their parents financially into adulthood. Many also live with their parents as a dependant into adulthood. When estate planning, parents of these children can set up a special needs trust to help meet their child’s needs even after the parents pass away.
What is a special needs trust?
A special needs trust is a unique type of trust that exists specifically to support an individual who is unable to work due to their disability. Depending on the location where the trust is set up, documentation may be required to confirm an individual’s eligibility for such a trust. A special needs trust or maybe a good idea even for parents who are unsure whether their child will one day be able to work, as it can be transitioned into a regular trust should this become the case.
What is needed to set up a special needs trust?
As with other kinds of trusts, a special needs trust involves setup fees on the front end. These fees may be higher due to the special considerations for this unique type of trust. Additionally, the state planners will need to appoint a trustee. The trustee can be a family member or other trusted individual, but cannot be the beneficiary themselves.
Besides the setup process, there are a few additional considerations when it comes to setting up a special needs trust. For example, if the beneficiary were to move to another state, it may be subjected to laws from both the original location and the new state of residence. There are also taxation and government reporting implications that should be clearly understood. An Oregon estate planning attorney is a good place to start to understand these ins and outs and to determine whether a special needs trust is worth pursuing.