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Adequately funding your child's special needs trust

When your child with special needs came into your life, everything changed. You certainly knew struggles and heartaches like never before, but you may also have experienced the kinds of joy many other parents take for granted. You may spend most of your days thinking about ways to protect and care for your child.

As the years pass, those challenges become more important. Unfortunately, as your child grows older, so do you. You know you will not always be around to provide that care and protection, so it is critical to learn about your options for continuing your support into your child's future. Adding a special needs trust to your estate plan is the first step, but you must also consider how to adequately fund that trust.

Why use a trust?

If your child receives or will receive benefits from the Social Security Administration, Supplemental Nutrition Assistance Program, public housing or other programs, he or she may not have income or assets above a certain amount. An inheritance from you or other family members could carry your child's asset value well over the limit, making your child ineligible for those critical benefits.

A special needs trust can hold and essentially own those assets, keeping your child within the limits of eligibility for these programs. This is a prudent way to provide for your child's future.

How much will your child need?

Figuring out how much to fund to your child's trust is a delicate process with many variables. You will need to estimate your child's living expenses, medical needs, and the cost of care to replace the services you provide now. Figuring for inflation and the rate of growth of the money in the trust, you will determine an annual amount your child will need and multiply it by the estimated life expectancy of your child.

This may seem like a difficult task, and you are right to feel emotional when thinking about the future in this way. However, it is important to establish and adequately fund your child's trust sooner rather than later. With the help of a New York attorney, you can have peace of mind that the trust will meet your child's needs when you are no longer able to do so.

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