If you want make a gift or leave an inheritance to someone with a physical or mental disability, you must plan carefully. Many individuals with special needs receive government benefits which place severe financial restrictions on eligibility. If a gift or inheritance causes the individual to exceed those limits, the benefits will be interrupted.

RELATED: Easing the burden: Estate planning and pets

RELATEDEasing the Burden: Family dynamics should be considered in estate planning


The individual is the beneficiary, but he or she does not have an actual ownership interest in the trust funds. However, the sole purpose of the trust is to provide the beneficiary with items or care over and above what the government benefits provide. If certain medical treatments or equipment are not covered by benefits, the trust could pay for them.

Moreover, the trust can pay for things which are not medically necessary, but which would enrich the disabled individual’s life, such as alternative health care, education expenses, summer camp, travel (including a companion, if necessary), furniture and electronic or computer equipment.

A special needs trust may be created and funded during your lifetime or upon your death. Further, you don’t need large sums of money to set one up. There are well-respected nonprofit organizations, such as WisPACT, Inc., that will facilitate and manage special needs trusts holding as little as a few thousand dollars.

Once established, the trust may receive additional funds at a later date from you or from other family members. Used properly, a special needs trust can be a wonderful tool to enrich the life of an individual with special needs.

Read or Share this story: