Some children cannot earn a living as adults due to a disability. However, you might not know for sure if your child will be incapable of holding down a job and living alone. Some people retain their independence in spite of a disabling condition.
Many parents of disabled children create a special needs trust to provide for their loved ones. If you are uncertain that your child will have a severe enough disability to require help, you can explore other options.
Put together a traditional trust
Even if your child does not qualify for a special needs trust, you can still create an ordinary trust to provide money for housing, transportation and care needs. Kiplinger explains that as a trust creator, you can write up the trust documents so your trustee will pay out money according to the needs of your child.
The trust can also protect assets for your child. If you foresee that your child will have to devote substantial income for medical care bills and may go into debt, the trust could hold property for your loved one so creditors cannot claim it.
Convert your trust in the future
Should your child demonstrate a need for disability help later on, you can include a provision in your trust to convert it into a special needs trust. Your instructions may change the trust if your child qualifies for government disability benefits such as Social Security Disability or Supplemental Security Income.
If your child remains self-sufficient, the trust will continue to operate as normal. Establishing a traditional trust may be of benefit to your loved one, but you should be certain that the cost of establishing the trust does not outweigh other options which could help your child.
