Trust for Special Needs

Friday, June 26th, 2009

When children have special needs, the parents would most likely worry about their future.  After, they’re gone, they are wondering who will take care of the needs of these children.

So if you’re a parent with this concern, you might consider “special needs trust.”  This is a trust used for disabled children.  It’s designed so that a child can receive government aid and still receive the benefits or inheritance from their parents.  The extra money can be used to enhance their self esteem and improve the quality of their life.  These items may include salon services, appliances clothing, automobiles, and computers.  However, it cannot be used for cash, food, or rent.

Wait-and-See Approach Trust and Omnibus Budget Reconciliation Act (OBRA) Trust are widely used.  Wait-and See Approach is used for high functioning child that may need government aid later while the OBRA is used when a child with special needs receives money from a lawsuit award or inheritance before trust is established.

Setting up a special needs trust may cost a little more, but remember that it’s a one-time setup cost.  You can have quick access to privacy and funds as well as avoid estate taxes.

Tags: children, OBRA, special needs, special needs trust, Wait-an-See Approach
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