TRS Benefits for Parents of Children with Disabilities

For families navigating the complexities of raising a child with special needs, long-term financial planning is more than a goal—it’s a necessity. If you’re a member of the Illinois Teachers’ Retirement System (TRS), you may have access to powerful tools that can help protect your child after you’re gone. 

Keep reading to learn more about a little-known but meaningful opportunity: TRS survivor benefits for dependents with disabilities—and how they can be integrated into your special needs plan.  

Note: We’ve chosen to highlight TRS because at 427,000 members, it is the largest public retirement system in Illinois. If you are a member of a public pension, be sure to check with your plan administrator to determine if it provides benefits to dependents with a disability. SURS, JRS, GARS, SERS, CTPF, PABF, FABF and FERS are just a handful of others to check out!

What TRS Offers

TRS provides survivor benefits that can extend to an unmarried child of any age who is disabled and financially dependent on the member. These benefits are designed to offer lifetime support, provided certain conditions are met:

  • The child must be claimed as a dependent on your final federal tax return
  • The disability must prevent substantial gainful employment and be expected to last at least 12 months or result in death
  • The dependent must be unmarried and unable to live independently due to the disability

Why This Matters for Special Needs Planning

If your child receives public benefits like Medicaid or SSI, pension income will trigger ineligibility and overpayment status. This is where Special Needs Trusts come in.

TRS allows you to designate a third-party Special Needs Trust as the beneficiary of your pension. This means:

  • Your child can receive TRS survivor benefits without losing eligibility for government programs
  • The Special Needs Trust must include specific, legally required language;
  • A trustee manages the funds for your child’s care, housing, and enrichment
  • The annuity can continue for your child’s entire lifetime, if structured properly

What You Can Do Now

If you’re a TRS member and a parent of a child with disabilities, consider these steps:

  1. Consult with our Team to establish a third-party Special Needs Trust
  2. Update your TRS beneficiary designation to name the trust.
  3. Keep documentation of your child’s disability and dependency status

Common Pitfalls

  • Not claiming your child as a dependent on your tax return even though he or she meets the definition.
  • Failing to establish a qualified, compliant third party Special Needs Trust for your child. 
  • Failing to designate the Special Needs Trust on your TRS Beneficiary Form.
  • Preparing a non-compliant Special Needs Trust with an unqualified attorney

Final Thought

TRS benefits can be a significant cornerstone of your child’s future security. With thoughtful and careful planning, you can ensure that your hard-earned pension can support your child for years to come.

If you are ready to set up your special needs plan and incorporate your TRS pension benefits, we are here to support you!

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