Theodor Geisel, best known by his pen name Dr. Seuss, is famous for his inspiring and humorous verses, including these lines from The Lorax: “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.” Though these words came as an admonishment from Dr. Seuss’s Lorax to the Once-ler intent on demolishing all of the Truffala trees of Lorax yore, this phrase can be seen as the rallying cry for parents of children with special needs. These parents, tasked with both the trials and triumphs of caring for their child with special needs, know all too well the truth in the Lorax’s statement—that they must be fierce, relentless advocates for their child.
Parents of a child with special needs often become adept at intervening on their child’s behalf with health care providers, educational facilitators, and government benefit coordinators to ensure their child’s physical, educational, and social well-being. However, a parent of a child with special needs will often face the same looming fear: what will happen to my child when I am no longer here to take care of him? For these parents, concerns may include their apprehension regarding long-term eligibility for government benefits, their worries about predators taking advantage of their child’s resources, and a desire to safeguard their child’s quality and standard of living.
Fortunately, many of these fears can be allayed through the estate planning process, including discussions with attorneys, financial advisors, and trusted friends and family members to create a plan by which parents of a child with special needs will ensure that their child will be cared for and protected during the remainder of their child’s life.
One of the estate planning tools most beneficial to parents of a child with special needs is the creation of a third-party special needs trust, sometimes called a supplemental needs trust, which provides a method by which parents (or other relatives or friends) can contribute assets to be utilized for the benefit of the individual with special needs. Importantly, a third-party special needs trust, if correctly drafted, will not interfere with the individual’s eligibility for government benefits, including Medicaid, Social Security disability benefits, and Supplemental Security Income. For parents of a child with special needs, this means that they do not need to disinherit their child, but may instead set aside funds to supplement their child’s standard of living, while ensuring that their child remains eligible for government benefits.
Third-party special needs trusts are designed to manage resources for the individual with special needs without conveying ownership of or control over the resources to the individual. This is a critical element of special needs planning, as ownership or control of assets may render an individual with special needs ineligible for government benefits. A properly drafted third-party special needs trust, however, avoids that problem, because while it holds assets to be used as a supplement to benefits received by the individual with special needs, the individual does not have any ownership claim to the assets, and they therefore do not count against the individual’s eligibility. Further, if family members wish to leave an inheritance for an individual with special needs, they can instead direct that the inheritance go to the third-party special needs trust, so that the inheritance may be used to pay for those items that are not covered by government benefits without risking the individual’s eligibility for benefits.
Perhaps the greatest benefit of a third-party special needs trust is the peace of mind it provides to those caring for a person with special needs. Rather than disinherit their child with special needs, relying on siblings or other family members to “do the right thing” in caring for the individual with special needs, parents can instead establish a third-party special needs trust and ensure that their child will continue to enjoy his or her same quality of life while remaining eligible for government benefits. The reassurance provided by a third-party special needs trust drafted by an estate planning attorney allows parents to instead focus their energies on, in the words of Dr. Seuss, caring “a whole awful lot” for their child with special needs.