2. For Families & Friends who care for a loved one with
a disability, the thought of not being there someday
can be overwhelming.
• You are not alone
• The best time to plan is NOW.
• The longer you delay, the more difficult
planning may become.
3. Questions that Parents have:
• What financial support will my loved one need when I am no longer here?
• Will my loved one be able to enjoy the same quality of life that they have
now?
• Who will administer the trust and ensure that the funds are managed and
used for the benefits of my loved ones?
• How can I ensure that needed SSI and Medicaid benefits will not be
jeopardized?
4. How a Special Needs Trust Works
Parents
(or relatives)
Establish a Trust
Government
Benefits
Special Needs Trust
Discretionary Payments
If Funded with Life Insurance, at
Parents’ passing, trust funded with
DB proceeds
Disabled Child
Supplementary Needs:
• Telephone
• Medical Care
• Special Equipment
• Education
• Entertainment, etc…
Basic Needs:
• Food
• Shelter
• Clothing
Cash or
Assets
Life Insurance
premiums gifted to
Trust.
5. Items to Consider:
• Parents can Act as the Trustees.
• Trust should be separate from the Family Trust.
• The trust may be revocable or irrevocable.
• Final beneficiaries should be named to receive the trust assets after the
disabled child dies.
• Family members should discuss the future management of the trust and
how it will be funded.
6. This is a highly specialized
document and should be drafted
by an attorney who is
experienced in the areas of
disability, government benefits
and estate planning.
7. How is a special needs trust
typically funded?
• Cash
• Investments (e.g. stocks, bonds)
• Retirement plan benefits (pensions,
401(k), IRA)
• Personal & Real Property
• Proceeds from a personal injury
settlement (applies to self settled trusts)
• …and Life Insurance
8. Why Life Insurance?
• Provides the leverage of
assets to fund trust.
• Permanent Insurance
• Survivorship
• The sooner established, the
lower the cost.
• Lock in parent’s insurability
9. What else should you consider?
• Selecting a Trustee
– A trustee is a person or institution selected to administer a
trust and manage its assets.
– Adheres to the terms of the terms of the trust & fulfills your
objectives.
– May name yourself or another family members or attorney,
bank or professional trustee.
• Pros & Cons for each…consult attorney
• Providing a Letter of Intent
– Draft a letter that outlines how you want your child cared
for after you’ve gone.
– Not legal document, but can provide guidance for others
involved as to your wishes.
– The letter may address such issues as your child’s
medical needs, daily routine, interests, likes, dislikes,
religious practices, living arrangements, social activities
and degree of self-sufficiency.
– Ensures your child’s transition goes as smooth as
possible.
10. Informing Family Members
Siblings & other family members
Explain Trust
Explain now to avoid family
conflicts later.
What else should you consider?
11. Other Special Needs
• What about a child with drug/alcohol addiction problems?
• What could the implications be for a child with addictions to inherited
large sums of money?
• Talk to your Estate Planning Attorney on how to address these issues.
