4MyChild: Help and Hope for Life

November 21, 2006

Setting up a Special Needs Trust for Special Needs Children

Parents of children with special needs, such as those with cerebral palsy should visit a lawyer set up a Special Needs Trust. A special needs trust is set up to allow use of property for the beneficiary without losing access to essential government services and benefits.

As it stands now a person who is disabled cannot inherit more than $2,000- it will interrupt his or her government benefits. Especially important are long-term care and nursing home benefits under the Medicaid welfare program.

Government benefit programs are now recognizing that family contributions can only improve a disabled person’s life. As long as the family’s contributions are supplementary and do not duplicate government benefit programs, they are allowed. Some current government benefit programs do let the family to provide some supplementary income and resources to the person with a disability. However, government regulations are very strict, and they are carefully monitored.

Special Needs Trusts are frequently used as a way to receive an inheritance or personal injury settlement proceeds on behalf of a disabled person in order to allow the person to qualify for Medicaid benefits.

A special needs trust can be used to buy such things as:

• Out-of-pocket medical and dental expenses
• Eyeglasses
• Transportation (including vehicle purchase)
• Maintenance of vehicles
• Insurance (including payment of premiums)
• Athletic training or competitions
• Personal care attendant or escort
• Rehabilitation
• Essential dietary needs
• Purchase materials for a hobby or recreation activity
• Purchase a computer or other electronic equipment
• Pay for trips or vacations, pay for entertainment like going to a movie, a ballgame, concert, etc.
• Purchase of goods and services that add pleasure and quality to life: videos, furniture, or a television

It is strongly advised if you are a parent of a special needs child that you speak with an attorney regarding the set up of a special needs trust.

For more info on Special Needs Trusts:
http://thearc.org/misc/futplan.html
Kid Source
Trust Funds & Care Giver Support
Michigan Trust Fund