Do you have a disabled child? Whether your child has a mental or physical disability, you will likely want to do everything possible to provide for their future. There's so much that goes into caring for a disabled child, including at-home renovations, the purchase of equipment, live-in care and more. So, how can you provide for your disabled child's future?
A common option many parents tend to go with to provide for their child's future is the special needs trust. This is just like all other trusts except that it is designated for a child who has special needs, such as a mental or physical disability. This trust still has a donor, a beneficiary and a trustee named in it.
A first party trust is another option. This is a trust where the assets are held in the trust and belong to the beneficiary of the trust. When the beneficiary passes away, the remaining money is paid back to the government in the event the beneficiary received any federal money during their life.
A third-party trust is when the assets of the trust are sent to the trustee and not the beneficiary. The biggest benefit of a third-party trust is that the remaining money is not paid back to the government. Instead, it is paid to any contingency beneficiaries still living when the primary beneficiary of the trust dies.
The creation of a conservatorship or a trust can help provide for the future of your disabled child. This is an important step in life you should not overlook. Ensuring your disabled child is cared for well after you are gone can make things a lot less stressful on you and your family.