Trusts can take many different forms such as living trusts (that you put assets into during your lifetime), testamentary trusts (that don't have any impact during your lifetime), revocable trusts (that can be changed), and irrevocable trusts (which cannot be changed after it's creation absent the consent of it's beneficiaries). A special needs trust is a unique class of trust.
A special needs trust has language in it, that is recognized by the government and courts, that relies on the principle that what you put into it is your money, and you can put conditions on it the way you want to. For efficiency's sake, the special needs trust can live within a larger trust. This way, you can accomplish most, if not all, of your estate planning goals in one trust, and you don't have multiple confusing documents floating around.
If you're worried about a trust fund interfering with your loved one's ability to obtain government assistance, don't be. We can put language in your trust that says that if the presence of the fund ever causes them to not be qualified for government assistance that they would be qualified for otherwise, the special needs trust essentially "blows up". The funds that would go to the special needs child will be distributed among your other children and beneficiaries, so that those people can take care of the person with special needs in a more informal fashion.
Once the special needs trust is drafted, remember your work is not over! The beneficiary designations and transfer-on-death registrations of your investment accounts will need to be transferred to the trust. If you leave these investment accounts to your children when you pass away, the structure we've set up in the trust will do nothing, because the trust will have no money in it.
After your estate planning documents are prepared, there are no ongoing fees to maintain the trust during your lifetime. However, once you pass away there will be a fee for the assets to be managed by the trustee. This fee will typically be 1% of the trust per year.
Guardianship is another important aspect you need to be thinking about when you have a child or grandchild with special needs. When this child turns 18, the parents will need to go to the probate court and apply to become a guardian of an adult child. They will no longer legally be considered the 'natural guardian' of the person with special needs. This guardianship will be completely independent of the trust. The trustee will have the full responsibility of distributing the money to the special needs person as they see fit. Of course, they can take into consideration the recommendations of the guardians, but it is ultimately their decision.