When Louisiana parents have a child with special needs, they may be able to provide that child with the services and medical care necessary only with the assistance of certain government programs. However, to qualify for these programs the child can only own assets with a total value under $2,000. A child may become ineligible for that critical assistance if his or her financial worth exceeds that amount, such as if the child receives an inheritance. This is why many parents create special needs trusts for their children who depend on such programs.
A special needs trust becomes the owner of any assets funded to it, so parents and others can leave inheritances that will not jeopardize the child’s eligibility for beneficial programs. The trust can be set up to provide for housing costs, clothing, entertainment and other expenses. The child can continue to receive the government benefits, and the income from the trust can supplement that amount.
Creating a trust can benefit a child who is not receiving government benefits as well. If the parents should pass away, they may leave the child with no protection from his or her own financial inexperience. A child may also be at the mercy of unscrupulous people who may take advantage of the child’s disabilities.
It is important that Louisiana parents seek advice from a legal professional who can help them determine the best way to budget for the appropriate amount to include in their special needs trusts. An attorney can also point out other expenses to include in the trust amount, such as tax ramifications and trust administration fees. With the guidance of a skilled attorney, parents of a child with special needs can have peace of mind that their loved one is well provided for.