A Fathers’ Day column by Sports Illustrated® writer, Rick Reilly, brought to mind how important it is that we plan for special children who may need extra care throughout their lives. Reilly told the story of a father and his son, who together were able to accomplish remarkable athletic feats.

The son was born with a birth defect that rendered him unable to talk, or move any of his limbs. Rather than view his disabilities as a limiting factor, his father began including him on his runs, pushing a wheelchair…on his bike, sitting on the handlebars…and on his swims, towing the boy in a small dingy.

Despite the fact that his son has learned to get along as a functioning adult, he will still require special care throughout his life. In this situation, a Special Needs Trust (SNT) can play an important role.

Government programs in the form of Supplemental Security Income (SSI) and Medicaid are available to help disabled persons with poverty level necessities of life…income for food and shelter and medical care.

To qualify for these benefits the disabled person must be impoverished. The disabled and/or their family applying on behalf of a child must show financial resources do not exceed certain limits and the benefit recipients are allowed to retain only a a certain amount in assets, with some exceptions. A person with a disability receiving SSI, who accumulates more this amount in cash resources, may lose SSI and, possibly, Medicaid.

The disabled need more than poverty level benefits. Yet, if the disabled person has the assets to pay for extras such as out of pocket medical expenses, transportation, property insurance, eyeglasses, rehabilitation or pay for the purchase of goods and services that add pleasure and quality to life like videos, furniture or TVs…they could be disqualified for SSI and possible loss of health insurance.

Parents planning for the future of a child can usually manage their assets to care for their child on SSI. However this issue becomes critical when the parents pass on. If they leave estate assets directly to the child they risk his/her disqualification from SSI. An estate plan that passes assets to a testamentary trust for the special needs of a disabled child can protect that child’s ability to qualify for SSI benefits.

The SNT can be funded with contributions from grandparents, other family members, as well as from a parent’s estate. Laws regulating these trusts are constantly changing and tightening the eligibility criteria for receiving government benefits. The complex nature of SNTs requires an in-depth knowledge of the current legislation, and how it impacts people planning for their child with special needs in order to preserve eligibility. Setting up a special needs trust requires coordinated planning with an attorney knowledgeable in special needs planning who can draft a will and necessary trust documents. This is not for the “do-it-yourself” estate planner.