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Elder Planning Isn't Just For The Elderly

What expenses can special needs trusts cover?

Having a child with a disability often requires some long-term planning. This is especially true if your child’s disability is likely to interfere with his or her ability to work. After all, while there are some public benefits available to those who cannot work, benefits are often meager.

Many parents opt to establish special needs trusts for the benefit of their children with disabilities. These trusts are brilliant, as they provide additional financial support without jeopardizing public benefits. Still, special needs trusts cannot cover all expenses.

What can special needs trusts not cover?

Before exploring what special needs trusts can cover, it is important to understand what they cannot cover. According to reporting from CNBC, a special needs trust can not pay for the same expenses that public benefits traditionally do. This generally means disbursements from a special needs trust cannot go to housing, utilities, food or basic medical care if those disbursements would be covered by government benefits the individual is entitled to.

What can special needs trusts cover?

Even though housing, utilities, food and basic medical care make up much of any person’s budget, there are many supplemental expenses that fall outside these areas. Special needs trusts typically can pay for these supplemental expenses, including but not limited to the following:

  • Education, training and enrichment activities
  • Travel
  • Home modifications and improvements
  • Magazines, books
  • Entertainment, video games, hobbies
  • Clothing

As you can see, disbursements from a special needs trust can pay for items and experiences that greatly enhance the quality of a person’s life. Ultimately, if you do not want your child to have a tough existence, setting up a special needs trust might be the right thing to do.


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