By: Julia Frey. If you have a child or other loved one who has special needs, such as serious physical or mental disabilities, the last thing you want to do in your estate plan is to provide for outright gifts or even a discretionary trust for that individual, if he or she may be entitled to governmental benefits. You need to establish a “Special Needs Trust” so that the assets in the trust do not render that person ineligible to obtain governmental benefits. By establishing a Special Needs Trust your loved one will be able to receive governmental benefits, and still have the Special Need Trust assets available to pay for the extras (such as travel, non-covered medical services) that are not covered by the governmental benefits plans. If you fail to set up a Special Needs Trust for your loved one, all of the hard-earned assets that you have set aside for your loved one will have to be spent, before any governmental benefits are available. This is not a result that is beneficial to you or your loved one.
