If your child is one of New Jersey’s numerous special needs children, you may have heard about special needs trusts, but do not really know what they are or what they do. Basically, a special needs trust is one you establish for the benefit of your child so that money will always be there to pay for the care (s)he needs throughout his or her lifetime, even if (s)he outlives you.
By naming yourself as the trustee of your child’s special needs trust, you maintain complete control over all the assets you place into it, just as you do now. The difference is that the trust now owns those assets instead of you and/or your child. In this way, since (s)he in no way owns the trust assets himself or herself, (s)he remains eligible for both state and federal funding and other benefits, not only those (s)he receives now, but also those that may become available in the future.
You can place whatever assets you want in your child’s special needs trust, but most parents make sure to include the following:
- Supplemental Security Income, Medicaid and other payments received
- Subsidies received for education, housing, employment, etc.
- Money and/or other assets inherited from anyone
- Money obtained from a lawsuit settlement or award
- Any other assets you desire, preferably income-generating ones
In addition to the financial benefits themselves, establishing a special needs trust for your child gives you the opportunity to designate a successor trustee to take over management of the trust should you become incapacitated or when you die. You can also list the types of things you want the trust assets and/or income therefrom to go for, such as the following:
- Basic necessities, such as food, clothing and housing
- Medical, dental and eye care
- Fun activities, such as movies, concerts, summer camps, vacations or whatever else your child particularly enjoys
- A monthly cash allowance if (s)he has the ability to handle his or her own money
You can also specify who you want to provide care for your child once you cannot provide it yourself, or in what facility you want him or her placed upon your death.