How to Fund Your Special Needs Trust
The most important thing to remember in funding your special needs trust is this: The special needs trust, not your child, must be the heir or beneficiary of any funds you or anyone else wants to transfer to your child.
Remember, always, if your child ever accumulates more than $2,000 in assets, he or she may become ineligible for receiving government benefits. Some states have stricter requirements, meaning that asset requirement may be below $2,000 (see Social Security Online. “Understanding Supplemental Security Income: SSI Resources.” 2010 Edition. Retrieved fromhttp://www.ssa.gov/ssi/text-resources-ussi.htm on November 20, 2010).
Here are some ways to fund your special needs trust (see News Digest—Estate Planning. National Information Center for Children and Youth with Disabilities. Washington, D.C. Volume 2, Number 1, 1992. Pages 6–8):
- Life insurance; it is one of the few ways to arrange for future funds after your death. Life insurance will be more affordable if you purchase it while you are young and healthy.
- Standard government benefits, such as Social Security survivor benefits.• Savings and investments, including money in retirement funds (that can be distributed at an older age or transferred after death).
- Gifts, assistance, and inheritances from friends and family members.
- Property, such as the family home.
- Military benefits.