Floridians who have family members with disabilities may want to consider setting up special needs trusts for their benefit. These are specialized types of trusts that help to provide care for disabled people after their loved ones have died.
Parents who have children with special needs can set up special needs trusts for them. The trusts do not interfere with their ability to receive disability benefits from the Social Security Administration or from Medicaid. The money that is held in these trusts can be used to directly pay for the person's housing costs, utility costs, food costs, dental costs, transportation expenses and other costs that are not paid for by SSDI or Medicaid. The money cannot be paid directly to the beneficiary, however, or it may interfere with their disability and medical benefits.
There is not a minimum amount that is necessary to fund a special needs trust. However, experts recommend that the trusts are funded with at least $100,000 because of the costs of administration. Basic special needs trusts cost an average of $2,000 to set up, but the costs can go up depending on their complexity. Banks may charge fees ranging from 0.5 percent to 1.5 percent annually to administer the trusts.
Special needs trusts can give parents who have children with disabilities peace of mind that their children will be cared for after the parents are gone. People might want to talk to experienced estate planning attorneys about whether or not special needs trusts might be beneficial for them. The attorneys may help to draft the documents that are needed to set up the trusts and assist their clients with choosing the trust administrators. When these trusts are set up correctly, the beneficiaries may be able to continue receiving their SSDI and Medicaid benefits while still having their other costs covered.