Estate planning attorneys urge parents of children with special needs to create a special needs trust to ensure their children will have access to government benefits like Supplemental Security Income (SSI) and Medicaid. An individual with special needs with as little as $2,000 in assets can be found ineligible for these services. A special needs trust, also known as a supplemental needs trust, allows you to provide for the child's needs without disqualifying him or her from receipt of government benefits.

Any individual who uses medical assistance or SSI needs a special needs trust. If your child will be able to obtain gainful employment and live independently when grown, he or she most likely does not need such a trust. However, some special needs may render a child unable to work or be fully independent. In those cases, you want to have a special needs trust in place to ensure they will be taken care of once you are gone.

Try to make a realistic projection of your child's future to determine whether or not a special needs trust is appropriate. Remember that individuals with certain conditions may experience more difficulties later in life, such as those with cerebral palsy or multiple sclerosis.

In order to establish a special needs trust, it is suggested that you contact an attorney, as there are different types of special needs trusts and different methods of establishing the trusts.

Another concern is choosing an appropriate trustee. The trustee is charged with using the money in the trust for the care of the individual with special needs. He or she must be careful to file taxes and invest, all while being extremely cautious as to not jeopardize the receipt of government benefits. This can be a difficult task, as government benefits, especially SSI, can change often. Some people even choose to name corporations or banks as trustees. These companies are in the business of serving as trustees, and they charge a fee.

Rather than creating a special needs trust, some parents might plan to leave money to a close relative with the understanding that the money will be used to care for the individual with special needs. However, this plan is not recommended. First, the relative cannot be legally compelled to use the money for the benefit of the individual with special needs. Second, should that relative die before the special needs individual, the money would go to the relative's heirs. Also, this money could be used in judgments or settlements against the relative. 

Related Resource: PennLive.com "Experts suggest trust funds for children with special needs" 8/22/10