A special needs trust is likely the best way to plan for your child’s future. It can help pay for things not covered by government assistance, such as transportation, education, computer equipment and medical expenses that public benefits do not cover as well as subsidize their living expenses and support they need.
There are different trusts to choose from that can help your child with special needs. A self-settled special needs trust, often called a first party special needs trust, is often set up when the child has received money directly through an inheritance or a personal injury lawsuit. A self-settled trust must be established by the individual with special needs if they are legally competent, or the parent, grandparent, guardian or the courts. Only the child with special needs can be the beneficiary. Self-settled trusts must include a provision directing the trustee, if the trust contains any funds upon the death of the beneficiary, to pay back anything the state Medicaid program has paid for the beneficiary. Also, the rules governing permissible distributions for self-settled special needs trusts can be more restrictive than a third party special needs trust. As of a new federal law passed in December 2016, a person who has the capacity and who does not have a legal guardian can set up his or her own first party special needs trust.
A third party special needs trust is usually established by the parents of a child with special needs who have assets that the child has no part of. A third party special needs trust is often used to hold an inheritance or a gift, yet still allow the child to qualify for government assistance. The assets in the trust are not given to the child, but rather, a trustee who use the funds for the benefit of the child. There are no limits to how much money the trust holds.
Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@example.com or call 866-To-Rubin.