By Linda Luther-Veno | Linda Luther-Veno LLC

When I talk with clients about their wills or trust, the conversation quickly turns to children. It is vitally important that I learn whether or not they have children, and if they do, whether or not any of the children have developmental or other serious difficulties.

Most parents recognize that if they both die, a minor child would need a guardian to take care of him or her, and possibly a trustee as well to manage the child’s inherited money up to a certain age. The age of majority in Pennsylvania, my state, is 18, but 18 is rather young to inherit a substantial sum. In these cases we do a testamentary trust (a trust within the will) that specifies that a designated trustee is to pay bills and manage the money for the child up to an older age. The expectation is the child will become more sensible by this specified age.

But what if the child has a cognitive deficit and will never be able to manage money? What if the child has a severe physical disability, or will never be able to support himself or herself? This could mean that government benefits (Medicaid) will cover the child’s basic needs in the future. This is a very valuable benefit not to be taken lightly. Medicaid, also called Medical Assistance, is a lifeline that could pay for the disabled child’s medical care and other basic needs, such as living in a group home.

Parents with substantial assets would likely want to do one type of trust for their nondisabled children, and a Special Needs Trust, also called a Supplemental Needs Trust, for the disabled child. Not every attorney knows how to properly set this trust up, so choose your attorney wisely. The disabled child’s inherited assets would be managed by a trustee so that funds only go for the child’s extra needs, not basic needs, so as not to disqualify the child from Medicaid. The precise language of the trust is what will keep the child eligible. This language will guide the trustee on what he or she can do. For example, the trust might expend money for a vacation for the child and a companion, for dental work or eyeglasses not covered by insurance, or for anything else that makes the child’s life easier and more pleasant and is not something Medicaid or other insurance would cover.

There is much more to know about this type of trust, so finding the right attorney is paramount. The National Academy of Elder Law Attorneys (NAELA) provides a directory of members and identifies members with experience advising and drafting special needs trusts. If your attorney is not a member of NAELA, make sure you confirm that he or she is well-skilled on how to draft this document. Someday, a Health and Human Services case-manager may scrutinize the wording of the trust, and it has to be exactly right for the sake of your child.

Linda Luther-Veno is a lawyer who heads her own law firm in Allentown, Pa. She concentrates her practice in estate planning, decedents’ estates, elder law, and serious injury cases. She is a member of the National Academy of Elder Law Attorneys.