I frequently have parents who have a child with special needs tell me that they need to omit their child from their estate plan because the child is receiving governmental or charitable benefits and that any inheritance left to that child will disrupt or terminate the benefits that they are receiving.
This is not the case. You can absolutely leave an inheritance to a child with special needs, even one receiving governmental or charitable benefits. You just have to do it the right way, meaning by using a special needs trust.
When you create a special needs trust for the benefit of your special needs child, this is commonly referred to as a “third party” special needs trust. Properly drafted, this type of trust will allow you to leave money or property to your child without affecting any governmental or charitable benefits that your child may be receiving.
Special needs trusts can be added to your current estate plan, either as an amendment to a current revocable trust or as a separate document.
If you have decided to create a special needs trust or to add one to your existing estate plan, you should consider another type of trust to protect your special needs child. Specifically, you should consider creating a “first party” special needs trust. A first party special needs trust is a trust you create for the benefit of your child. However, it is not meant to be funded with an inheritance you leave to your special needs child. Rather, a first party special needs trust is meant to be funded with assets that someone else accidentally left to your child that would otherwise disrupt any governmental or charitable benefits your child may be receiving. This type of trust would allow your child to place the “accidental” inheritance into the trust without disrupting any governmental or charitable benefits that they may be receiving.
As you can see, it is absolutely possible to leave assets to a child with special needs. You just need to use the right documents as part of your overall estate plan.