What are the benefits of using a trust to save funds for my special needs child?
For the parents of special needs children, worries for the future abound. Having a child with special needs presents many challenges, not the least of which are financial. The current American healthcare system leaves many families with special needs loved ones struggling to provide for their medical care needs. Currently, about 7.2 million children under the age of 18 have severe disabilities, according to the Census Bureau. Planning for the long term care of these disabled children is a momentous obstacle. Our Orange County special needs trust attorneys discuss how you might be able to use special needs trusts to save in the most efficient manner possible for your disabled child.
The Costs of a Disability
The costs of lifetime care of a disabled minor are astronomical. According to Autism Speaks, the lifetime costs of a person with autism are between $1.4 million and $2.4 million, depending on the individual’s level of functioning. Disabilities that require 24/7 care will easily cost a family $100,000 per year. Even lesser disorders will be quite costly, with services such as reading specialists costing about $150 an hour, while other therapies like music and water therapy can run far more.
Parents of disabled children are often faced with the harsh reality that their child will outlive them, but will still require their financial assistance to carry them through the remainder of their lifetimes. As such, parents will need to calculate their child’s expected lifespan and the likely cost per year to provide for the child. Additionally, parents will need to look into the various government assistance programs that can benefit their child. Supplemental Security Insurance and Medicaid are two such programs that could provide significant savings for your child, but these programs come with some financial restrictions.
Special Needs Trusts
To this end, the parents of special needs children may wish to create a special needs trust, in which they can place assets for the benefit of their special needs child. These trusts are irrevocable and can only be used for the benefit of the child. They will not count towards the child’s assets, thus not rendering the child ineligible for government assistance. There are several options when it comes to special needs trusts, including pooled trusts which are less expensive to set up. Contact an estate planning lawyer to get started with planning for the future of your special needs child today.