Is a special needs trust right for you?

| Dec 22, 2020 | Estate Planning |

Estate planning is about so much more than just figuring out who is going to receive your personal property when you pass away. It’s also about protecting yourself in the event of incapacity, motivating your loved one’s to do something after you are gone, and even protecting the long-term financial interests of your loved ones.

Loved ones who have a medical condition or some other special need fall into that latter category. Simply leaving wealth to these individuals could actually end up causing them financial harm because it could disqualify them from receiving certain government benefits, such as Supplemental Security Income and Medicaid. This is because these government programs have limitations on a recipient’s income and assets. So what can you do to protect those benefits while still providing for your loved one? Consider a special needs trust.

The benefits of a special needs trust

The assets in a special needs trust can be used to help cover many of your loved one’s expenses without affecting eligibility for government programs. Trust assets that are used to pay for medical expenses not covered by Medicaid, for example, will not be counted for eligibility purposes, but the use of these trust assets can be much broader. In fact, special needs trust assets can be used to help pay for a primary residence, a vehicle, furniture, and even personal effects, all without affecting eligibility. In other words, when properly created, a special needs trust can go a long way toward providing financial stability in the long-term.

Don’t assume anything

One of the biggest problems people face when it comes to estate planning is that they make too many assumptions. They assume that their assets will automatically pass in accordance with their wishes or that the family won’t fight over who should inherit what. These assumptions place your estate and your family members’ relationships with one another at risk. If you want to maintain control over your assets and ensure that they are used as effectively and efficiently as possible, while still adhering to your wishes, then you might want to discuss your situation with an experienced attorney who can help you develop the customized estate plan that you need.