One of the most effective ways to prepare for the future of your child with special needs is to establish a Special Needs Trust tailored to the individual needs of your loved. Special Needs Trusts, also known as Supplemental Needs Trusts, are usually set up as inter vivos trusts for the benefit of one child. The Trust is created separately from a family’s estate for tax purposes and is managed by a trustee. Since this Trust is established during a primary caregiver’s lifetime, the trustees are usually the parents. This allows those who know the individual with special needs best to be able to make an organic plan that will grow under the right circumstances.
Another advantage to a Special Needs Trust created during your lifetime is that it establishes a pattern that may be used by future trustees. Parents who, as trustees, write checks for daily and monthly expenses from a Special Needs Trust are showing what types of things will be acceptable expenditures from the Trust when new trustees take over the responsibility of managing the Trust.