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    This trust may benefit special needs individuals

    Document ensures disabled individual’s financial needs are met without cutting existing benefits

    Joel M. Blau, CFPJoel M. Blau, CFP Ronald J. Paprocki, JD, CFP, CHBCRonald J. Paprocki, JD, CFP, CHBC


    Is there a way to establish a special needs trust that doesn’t reduce potential government assistance?

    Ongoing medical advances, an aging population, and the increase of conditions such as autism are combining to produce a growing need for a particular type of estate-planning tool: the special needs trust. 

    Related: Can life insurance be used to pay estate taxes?

    The aging couple whose adult child has severe autism might want a special needs trust because they are worried about how the child will survive after the parents' deaths. Or a group of siblings may want to set up a special needs trust for their young sister, who is now a teenager but is expected to need supervision for the rest of her life.

    Many people depend on government benefits such as Social Security, Medicaid, rehabilitative care, and transportation assistance available for children and adults with special needs. However, these benefits can be dramatically reduced if an individual's assets exceed a certain level. If loved ones give the individual too much money or provide assistance in a way that breaks the rules, the person could lose benefits. This is a trap many families fall into.

    Also see: Legislation renews IRA charity tax break

    A special needs trust allows parents (and others who care about someone with a disability) to comply with government regulations yet invest and save money to meet a disabled individual's financial needs throughout their lifetime.

    Next: "In most cases, a special needs trust is a "stand-alone" document, but it can be part of a will."

    Joel M. Blau, CFP
    Mr. Blau is chief executive officer of MEDIQUS Asset Advisors, Inc., in Chicago. He can be reached at 800-883-8555 or [email protected]
    Ronald J. Paprocki, JD, CFP, CHBC
    Mr. Paprocki is chief executive officer of MEDIQUS Asset Advisors, Inc. in Chicago.


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