Michigan parents of children with autism or other disabilities may have a desire to protect the future of their children in the event of the parents' deaths. An excellent tool to help parents achieve this goal is a special needs trust. Parents who are considering setting up a special needs trust for their child should understand the laws concerning how these tools work and how to best plan for their child's future with such a trust.
Special Needs Trusts were first allowed in 1993. These trusts are administered by a third party and allow those with disabilities to keep their government aid.
The government offers aid to individuals with disabilities through Supplemental Security Income and Medicaid. When an individual has more than $2,000 in personal assets they no longer qualify for this government aid. A special needs trust allows one to keep his or her government benefits while an inheritance gifted by a will alone would not allow for this.
The income from these trusts is not allowed to be paid to the beneficiary directly. Instead, the trustee will be responsible for using the money to pay for things such as travel, cultural experiences, and entertainment that the beneficiary would not be able to afford using only their government aid.
When leaving an inheritance to a person with special needs, it is important to leave the inheritance to the trust instead of the individual. When setting up these trusts, it is important to be aware of the legal aspects to ensure that the child is taken care of in the way that the parents intended.
Source: Zanesville Times Recorder, "Special Needs Trusts needed in some situations," Scott Webb, Nov. 17, 2012