Financial security for oneself and family members is of paramount importance in one’s life, and people work hard to create wealth and provide for the welfare of their families. The need to provide such financial security becomes a little more complex for parents of children with special needs. Such children require greater financial support to meet their regular living expenses, medical expenses, attendant expenses, special education needs, and other expenses to provide comfort to them.
Though parents of such children have adequate financial resources to provide financial support, one of their concerns is ensuring financial security for a special child, especially after their death. Bequeathing the estate through a “WILL” to a special child is not a suitable option as the child cannot manage the estate due to disability.
The other option for such parents is to leave the estate with a family member (brothers/sisters) and with a direction to use it for the well-being of the special child. But the other side of such an arrangement is that there could be a change of mind or legal impediments in the management of an estate or a void due to the death or disability of such a family member.
Setting up a private trust with the objective of the well-being of the child and leaving the legacy to the trust is perhaps a suitable option for ensuring the financial security of the special child. A trust is a relationship where the property is held by one party for the benefit of another party. The owner creates a trust, also called a “settlor,” “trustee,” or “grantor,” who transfers property to a trustee. The trustee holds that property for the trust’s beneficiaries.
A specific beneficiary private trust with adequate provisions provides significant safeguards to protect and provide funds for a special child’s well-being. Planning for financial security for a child with special needs is unique. The parents have two options: avoid the planning and continue with life as it comes, or fix it with a suitable plan.