Giving money directly to someone else to care for your loved one (even to a trusted child or friend), instead of leaving the inheritance in a Special Needs Trust, has many hidden risks. These risks exist because when you give your assets to someone, they become the legal owner of them. This can have unfortunate consequences such as:
If that person become disabled, they law requires that the assets be spent on his or her care instead of on your loved one’s care;
If that person dies, the law requires that the assets be distributed according to that person’s estate plan;
If that person has financial difficulties, the assets might be lost to that person’s creditors;
If that person goes through a divorce, the assets might be lost to an ex-spouse; and
If that person wants to, he can spend the assets however he wants (and not necessarily for your child’s care) since legally the assets belong to him.
For all these reasons, and many others, protecting assets in a Special Needs Trust is much wiser than leaving them at risk as described above.