Ask the Expert: A special needs trust in your will

My will provides for a special needs trust for my adult child, who is handicapped and is now on SSI and Medicaid. But nobody can tell me two things: How much do I "seed" the trust fund? And what happens to the balance remaining in the trust if the child dies?

You don't "seed" -- i.e., deposit -- anything into a trust that is created in your will because this type of trust doesn't actually exist until after you've died.

When your will is probated, the court appoints the trustees you've named. It also authorizes your executor to transfer assets into the trust as directed in the will.

You're wise to leave assets to your disabled child in a special needs trust for his benefit. If you left his inheritance to him outright, it could disqualify him for Medicaid and SSI, two government programs that are based on financial need. Medicaid pays for health care. SSI is Supplemental Security Income that can be used for any expenses.

A special needs trust is very carefully written so that the trust assets will supplement government assistance, not replace it. The money in the trust can only be used to pay for things government programs don't cover -- like a flat-screen TV, or a vacation, or a professional advocate who will make sure your child gets the services he needs.

Typically, the trust doesn't terminate until its beneficiary's death. Your trust document can say what happens to any balance that is left in the trust.

(Click here for more information on special needs trusts.)

The Expert wants to know: Have you decided to keep your money in a 401(k) or switch to an IRA when you retire? E-mail your answer, name, address and phone number to act2@newsday.com.