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Caring for special needs children through trust planning

The thought of a parent leaving a child behind after death may be an unpleasant one for many St. Paul residents. This can be especially true for parents who have minor children or children with disabilities, as those children often depend heavily on the parents to provide for daily necessities.

Fortunately, there are ways in which parents can protect their children, even after death, through proper estate planning. A sensible estate plan will not only account for the distribution of a parent's assets, it will also take the children's needs at heart and provide appropriate means for caring for the child's needs.

For instance, through proper trust planning, parents can set up a special needs trust for a child with a disability. The trust can accomplish multiple factors, such as providing for the child's needs through the trust assets, while also ensuring the child does not become ineligible for government benefits, which are often means-tested.

The trust can not only be funded with the parent's assets, but also with gifts from family and friends. These family members and friends may, through no fault of their own, unintentionally cause some issues for means-tested benefits if the gifts reach a certain value. Therefore, by placing these assets within the trust, individuals can account for the child's needs while continuing to allow the child to receive the much-needed benefits.

Parents can set up a trust by naming themselves as trustee during lifetime, and providing for a successor to take over at their death. The choice of a proper successor trustee, as with other matters, takes some time and consideration, as individuals must determine, among other matters, whether to appoint a corporate trustee or individual trustee.

Source: Disability Rights Washington, "Special Needs Trusts," accessed Aug. 14, 2014

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