How to Set Up a Special Needs Trust & Create a Loving Future Your Loved One

When you’re raising a child with special needs, your days are filled with a unique blend of joy, challenges, and unwavering love. You’ve probably spent countless hours ensuring your little one has the best care, support, and opportunities possible.

It’s not always easy to think about the future, especially when it involves planning for a time when you might not be around. But as parents, we know that looking ahead and preparing for every possibility is just another way we show our love and dedication to our children. Creating a special needs trust is one of the most important steps you can take to ensure your child’s long-term well-being and care.

What is a Special Needs Trust?

A special needs trust is a legal arrangement that holds money and assets for a child with special needs without affecting their eligibility for important government benefits like Medicaid or Supplemental Security Income (SSI).

Why is this important? Well, government programs often have strict limits on how much money or assets a person can have. If your child suddenly inherits a large sum of money directly, they might lose these crucial benefits. A special needs trust lets you provide for your child’s extra needs without putting their essential benefits at risk.

What Can a Special Needs Trust Pay For?

The great thing about a special needs trust is that it can cover all those extras that make life richer and more comfortable. Think about:

• Extra medical care or therapies
• A personal care attendant
• Educational programs
• Fun stuff like movie tickets or a new iPad
• Travel expenses for family visits
• Furniture and household items
• And so much more!

It’s all about enhancing your child’s quality of life, beyond what government benefits provide.

How to Set Up a Special Needs Trust in North Carolina

Now, let’s get to the heart of the matter – how do you actually set up one of these trusts? Don’t worry, we’ll break it down into manageable steps.

1. Decide on the Type of Trust: In North Carolina, you’ve got two main options:
   • Third-Party Special Needs Trust: This is set up and funded by someone other than your child (usually you, the parents).
   • First-Party Special Needs Trust: This is funded with your child’s own assets, often from a lawsuit settlement or inheritance. For most families, a third-party trust is the way to go.
2. Choose a Trustee: This is the person who’ll manage the trust. It could be you, another family member, or a professional trustee. Choose someone you trust who’s good with money and understands your child’s needs.
3. Determine What to Put in the Trust: Think about what assets you want to use to fund the trust. This could be life insurance policies, savings, investments, or even property.
4. Get the Paperwork Done: This is where having a good attorney really helps. The trust document needs to be carefully worded to comply with North Carolina law and federal benefit regulations.
5. Sign and Notarize: Once the document is prepared, you’ll need to sign it in front of a notary to make it official.
6. Fund the Trust: After it’s set up, you’ll need to transfer assets into the trust or set it up to receive funds in the future (like from your life insurance).
7. Coordinate with Your Estate Plan: Make sure your will and other estate planning documents align with the trust.
8. Review and Update: Life changes, and so might your trust. Plan to review it every few years or when there’s a big change in your family’s situation.

Why Start Now?

It’s easy to put off estate planning. Life is already full of daily responsibilities, especially when you’re caring for a child with special needs. However, many families find that starting the process sooner rather than later brings immense peace of mind. The earlier you begin planning, the more prepared you’ll feel for whatever the future may bring.

Creating a special needs trust isn’t just about money – it’s an act of love. It’s a way to extend your care and support beyond your lifetime, making sure your child always has that extra layer of protection and support.

How We Help You Create Tailored Special Needs Trusts

Now, we know that legal stuff can sometimes feel overwhelming. That’s why we at Johnson Legal believe in keeping things simple and personal.

Here’s how we approach creating a special needs trust:

1. We Listen: First, we sit down and really get to know you and your child. What are your hopes, your worries? What makes your child’s face light up? Understanding your unique situation helps us create a plan that truly fits.
2. We Explain: We break down all the legal jargon into plain English. No confusing language, just clear explanations so you know exactly what’s happening.
3. We Plan: Together, we’ll map out a trust that works for your family. We’ll help you decide things like who should manage the trust (called a trustee) and how the money should be used.
4. We Create: We’ll draft all the necessary documents, making sure everything is legally sound and truly reflects your wishes.
5. We Support: Our relationship doesn’t end when the documents are signed. We’re here for the long haul, ready to help if things change or you have questions down the road.

Our team at Johnson Legal is honored to help families like yours plan for the future. We know it’s not always an easy conversation to have, but we promise to make the process as comfortable and reassuring as possible.

If you’re ready to get started, we’re here, ready to listen and help. Let’s work together to create a future full of love, care, and support for your special one.