If you have a disabled adult child, you may benefit from including a special needs trust in your overall estate plan. Disbursements from this type of trust cover supplemental expenses while preserving your son’s or daughter’s eligibility for needs-based government benefits.
Even though you cannot care for your disabled son or daughter forever, you can take steps to ensure he or she has the best possible quality of life after your death. When you create a special needs trust, you name a trustee to oversee it. This individual has a fiduciary obligation to perform certain duties.
Bookkeeping and oversight responsibilities
Special needs trusts must comply with a variety of tax and other regulations. The trustee is responsible for all bookkeeping and oversight activities, some of which he or she may delegate to someone else.
These include the following:
- Prepare tax filings
- Keep relevant trust records
- Invest trust assets properly
- Communicate with financial institutions and government agencies
The special needs trustee may also send you regular reports about the status of the trust. Furthermore, he or she should promptly respond to your trust-related questions and concerns.
Eligibility monitoring and associated tasks
Knowing the special needs trustee is likely to keep a close eye on the trust may give you some financial peace of mind. As a parent, though, you need additional assurance your disabled child has what he or she needs to thrive.
Your special needs trustee must ensure your son or daughter continues to be eligible for government benefits. Additionally, the trustee may collaborate with health care providers, such as your child’s case worker, to access necessary care or services.
By closely monitoring benefits eligibility and providing funds for supplemental expenses, the trustee assumes responsibility to improve your child’s quality of life.