Special Needs Trust

If I have a special needs child, how are those considerations handled in a trust?

A special needs child is usually the subject of a special needs trust. The big distinction is if you have a special needs child ‑‑ autism, Down Syndrome or other types of disabilities ‑‑ then they’re frequently as they grow up going to be placed in some kind of state‑funded housing and/or job training. Say you created a regular trust, and that you had three children, one that has special needs. In your trust, you said, “I want my trust to distribute in three equal shares to these three children.” If your child with special needs inherits money, the state takes it, because the state is providing for their care. So they will take it.

A special needs trust, on the other hand, is designed to place a certain amount of money ‑‑ again, it could be a third of the estate ‑‑ into this trust where the beneficiary has no right to the money, but the trustee is to use it to enhance their living situation, quality of life, their living situation.

The trustee has basically unfettered discretion to either spend or not spend the money. The concept is they’re not to spend the money on anything to supplant anything that the state or county would ordinarily supply, but that same person, if they need things that the state or county will not supply.

And those things ‑‑ say it’s a computer that the state isn’t going to buy it, a $500 or $600 or $700 computer for somebody, but that computer’s going to enhance their ability to communicate or to gain information or learn job training skills or things like that, then the trustee can say, “OK. We’re going to go in and buy this person a computer that will help enhance their living experience.”

It can be as simple as they need a wheelchair. The county says, “We’ll put you in a standard basic wheelchair that you have to roll around wherever you go.” The trustee says, “Well, they’ll be much better served if they have an electric wheelchair that they can operate with one hand or one finger or whatever. So we’ll pay and we’ll get him that kind of wheelchair.” That can have a tremendous impact on their lifestyle and their comfort and so forth.

Those are things that the trustee is supposed to use the funds for, but not for food, clothing, and things like that that the state’s going to provide.