How Trusts Can Help Heirs with Special Needs

10:07 pm California Trusts, Estate Planning

special needs trust 150x150 How Trusts Can Help Heirs with Special NeedsProbably one of the most prevalent worries for parents of special needs children is the long-term care of that child once the parents are gone.  There are ways to plan for the care of a long-term special needs heir via special trusts, including:

Housing – A special needs trust allows parents to place assets in trust for the benefit of a special needs heir without endangering their government benefits.  A qualified personal residence trust (QPRT) allows parents to stay in the home with the special needs child, and upon their death transfers ownership to an heir – for example, another adult child or a charity – at a discount to the current market value.

Long-term care – should the parent of a special needs child under the age of 65 need long-term care, a special needs trust can shelter parental assets and still allow the parent to qualify for Medicaid coverage.

Inheritance – in order to avoid a special needs child from being disqualified for government services, parents may be tempted to leave everything to their other children with the proviso that they care for their special needs sibling.  However, those assets could go to others if one of the other children gets divorced or dies.  Parents should consider leaving equal shares to all children, and placing the special needs child’s shares in a trust.

Help is available to you by contacting your Southern California financial planning experts today.

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