How to take care of money for a disabled child's future (adult or under 18)
There are three ways to shelter money for your disabled child's present and future needs.
Special Needs TrustsSpecial Needs Trusts are created in a document prepared by a lawyer. Someone (parent or grandparent, or a court) sets up the Special Needs Trust (SNT) by signing the document and putting money (even a small amount) into ownership by the Trustee on behalf of the beneficiary, the person protected. They cannot own the money, but it can be used to provide care, subsidize some expenses or add extras to their life to add to their enjoyment. The rules are strict, but the benefit is great- they continue to qualify for needs based public benefits because the money in the SNT is not considered as theirs. It is handled for them.
Developmental Disabilities Life Opportunity Trust (DDLOT) which is also called a pooled trustThis is a very low overhead method to put money aside is an account under the umbrella of a larger Trust, with professional investment and management (but low cost to operate). This is similar to a bank account as a concept. Money is put aside for someone you love who has a disability. Family members can request money for specific purposes to benefit the Beneficiary, and his public benefits remain in place. This is great for small amount of money.
ABLE AccountThere is a new kind of account that can be another, different way to aid a person with disabilities, because it allows spending up to a certain amount per year to help with a disabled person's living expenses. Think of this one like a college fund sort of set-up. The gift can come yearly from a relative or friend, and be used to pay for expenses that are not usually allowed to be paid from an SNT and a pooled trust.