If you have a disabled child, it is imperative that you seek the assistance of qualified, legal counsel like Maura Curran for your estate planning. Typically, you cannot leave funds outright to your special needs child without pushing your child over the threshold for assets or income and disqualifying your child from receipt of governmental benefits. Thus, obtaining a Special Needs Trust is essential.
A Special Needs Trust allows a trustee to distribute the funds or assets at his/her own discretion. This allows your child to continue receiving governmental benefits without being disqualified. Of course, having a trust receive the funds outright may have some tax implications, so it is important to discuss this with your attorney.
If you are considering a Special Needs Trust, it is critical that it is property drafted to qualify as a designated beneficiary under the current Internal Revenue Service regulations. It some cases, it may make sense to allow the trust to pay the taxes and invest the net proceeds, but this decision should be thoroughly discussed with your attorney before the trust is named as the beneficiary of this qualified plan.
If you are interested in creating a Special Needs Trust, contact a knowledgeable attorney like Maura Curran. She can help you protect your special needs child and insure that he/she will remain eligible to receive governmental benefits.