A disabled minor or an adult child may benefit from your assets through a special or supplemental needs trust. As part of an estate plan, you may create a trust to protect your child from caretakers seeking to take advantage of a vulnerable individual.
As reported by Kiplinger’s Personal Finance, a trustee of your choice could help your child by managing properties placed in a trust. He or she may distribute funds as needed for your child’s expenses. Your chosen trustee may also assist an adult child in maintaining a residence.
How does a trustee oversee my assets?
A trust includes written instructions, which generally dictate how your trustee manages your trust’s assets. As noted by Barron’s magazine, you may include personal details such as your child’s behaviors, likes and dislikes.
You may also describe your child’s medical treatment, therapies and prescriptions. If your child participates in recreational activities or attends a particular school, a trustee could oversee payments for tuition and transportation.
How may I fund a trust for my disabled child?
Once you create a trust, you may transfer cash, investments and other valuable assets to it. This process may include retitling the deed of your property to your trust, according to the New York State Bar Association.
Some financial institutions allow you to name your trust as an account beneficiary. As noted by Bankrate.com, you may also fund a child’s special needs trust through a life insurance policy. An insurance carrier may allow you to name a trust as the beneficiary. Proceeds, however, do not disburse until your death.
A special needs trust could help you prepare a plan to care for a disabled adult or minor child after your death. Your chosen trustee follows your instructions to facilitate a child’s living and medical needs.