Parents with a disabled child will necessarily be concerned about their child's financial security and personal well being after the parents have died. Special needs planning allows parents to put a plan in place to support their children and enhance their quality of life. A plan can provide a guide for medical care and management of assets and protect assets from creditors and predators. One important component is a special needs trust that, like other trusts, will put assets in the control of a trust advisor who will take care of the disabled child's financial needs. These trusts are known as third party special needs trusts and are funded with a parent or other person's assets or life insurance.
If a disabled person obtains their own money, either through inheritance or through a judgment or award of money, a first party special needs trust can be used to provide management of the assets and creditor protection. These first party special needs trusts also have the added benefit of maintaining eligibility for public benefits such as Supplemental Security Income and Medicaid.
