It is natural for parents with adult children who have disabilities to worry about the comfort and security of their lives after they’re gone. Leaving an inheritance directly to an adult with special needs can jeopardize their eligibility for vital government benefits like Medicaid and Supplemental Security Income (SSI). Fortunately, Maryland has options to protect your child’s inheritance and ensure their continued well-being.

The power of Special Needs Trust

A Special Needs Trust (SNT) acts as a separate legal entity holding assets for your child’s benefit. Since the trust, not your child, owns the assets, it doesn’t affect their eligibility for government programs. There are two main types of SNTs that you can consider:

• Third-Party SNT: This is the most common option. You, or another family member, create and fund the trust during your lifetime.
• Self-Settled SNT: In some cases, your child can establish an SNT with their own assets. This gives them the legal right to use the money without restriction, but strict rules apply.

You can fund an SNT using various assets, including cash, investments or life insurance proceeds. Because contributions are irrevocable, careful planning is essential.

Choosing the right trustee

An important element of any SNT is the trustee. This responsible individual manages the trust’s assets according to your wishes, ensuring they improve your child’s quality of life. In choosing a trustee, you may consider factors like trustworthiness, financial literacy and compatibility with your child’s needs.

Benefits beyond government assistance

SNTs offer more than just preserving benefits eligibility. Trust funds can be used for expenses not covered by government programs, such as:

• Educational therapies
• Vocational training
• Travel and recreation
• Specialized equipment

Estate planning for a special needs child can be complex. Consider consulting with a professional specializing in elder and special needs law. They may help guide you through the intricacies of SNTs, navigate legalities, and ensure your long-term plan aligns with your child’s specific needs.

By taking these steps, you may be able to leave a legacy that protects your child’s financial security and future well-being, giving you peace of mind and ensuring their continued care.