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An Explanation of Special Needs Trusts for Massachusetts Parents

Parents of special needs children understand the difficulty in remaining financially stable while raising their child. One problem that many run into is how to provide their child with money without affecting their ability to qualify for some government assistance programs such as Social Security and Medicare. At a certain income level, a person is disqualified from these programs, but through a special needs trust, parents can avoid this issue.

Special needs trusts are set up by parents as a way to save money for their child. Simply putting a savings account in a child’s name can put their assets over the level that allows government assistance, but a special needs trust allows a trustee to disperse payments to a special needs individual as they’re needed. This prevents the child from losing payments from government programs.

Special needs trusts are beneficial in the fact that just about any income can be put into them. A parent can even have their life insurance policy attached to the trust so their child is cared for in the event of their untimely demise. Additionally, family members and friends of the family can contribute to the trust without any issues arising.

It should be noted, though, that the funds from a special needs trust cannot be used for everything. Expenses related to rehabilitation, education, transportation and medical costs that government benefits do not cover are fine. The funds cannot, however, be used for things like utilities, property taxes or housing.

For parents with special needs children, it can be difficult to navigate the complex rules of providing financial assistance to their child without affecting their government aid. A parent who simply gives their child money could cause their Medicare or SSI benefits to cease, or a misunderstanding in what the trust can be used for can also cause issues. With legal assistance, however, a parent may be able to ensure that their child is well taken care of long after they’re gone.

Source:, “The Special Needs Trust“, October 21, 2014

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