A New York parent of a child with a disability may want to set up a special needs trust so that the child can still continue to receive government benefits such as health care upon disbursement of the assets. The special needs trust can be set up during the parent's lifetime or after his or her death, and the device may be able to help ensure the child's future stability.
In order to set up the special needs trust, a trustee must be selected. The trustee job will be to help administer and disperse the funds to the child according to the the child's needs and the terms of the trust. The trustee might also help manage the funds and disbursements in a way that the child does not become ineligible to receive government benefits.
Any funds intended for the recipient must actually be placed into the trust rather than be given directly to the child. The trust can also be set up as a beneficiary of life insurance policies, annuities, social security survivor benefits, military benefits and tangible property, such as real estate. Friends and family can contribute funds to the trust as well. The state allows funds in the trust to be used for transportation, medical expenses not covered by government programs, home health care aides, education, rehabilitation services and computers.
A lawyer experienced in the fields of elder care and family law may be able to assist someone in setting up a special needs trust for loved ones. The lawyer may help choose the trustee, explain trust management concerns and designate an individual for health proxy, guardianship and power of attorney.
Source: Pacer.org, "The Special Needs Trust", October 13, 2014