Moreover, you may want the family home to stay in the family and not have to be sold to provide necessary care. These types of options, however, do not generally provide a guaranteed amount of income due to market instability and other factors. Retirement plans may offer another option. You may be able to name the trust as beneficiary for any death benefit provided by the plan. Many special needs trust are funded, at least in part, with some type of life insurance.
Life insurance provides an alternative that can create an asset.
Insurance proceeds are generally paid free of income tax and, as long as the estate is not named as beneficiary, usually outside probate. It also can be free of federal estate tax when properly structured. It also allows you to provide the cash needed to provide for your child with special needs, while keeping the rest of your estate intact for your other family members. Here are descriptions of the basic types of life insurance. Term life insurance offers protection that insures your family for a specified period of time - usually anywhere from one to 20 years.