Estate Planning For Special Needs

Provisions to protect those with special needs or disabilities should be in every estate plan. Even those who are blessed to have all healthy family members should make provisions in case an heir becomes disabled after creating the plan. Injuries from accidents, illness, strokes, etc. strike at random. It is much better to have prepared for those issues. That preparation is a Supplemental Needs Trust.

Those who have heirs with special needs put them in danger without good planning. If someone passes and leaves assets to someone receiving needs-based benefits such as Medicaid or SSI, those benefits would likely be lost or greatly diminished. The very asset left to the heir could jeopardize the person it was intended to benefit.

If it were discovered by others that your heir now has assets, he or she would be surrounded by people trying to take it away. Other family could try and prevent this by filing for guardianship and conservatorship, which would take time and money. While this might prevent exploitation, it would not prevent the loss of benefits.

Benefits could be regained by placing the money in an 803(b) pooled trust. This would continue to cost money to manage and have significant restrictions on the money placed there. Additionally, when the beneficiary passed away, the money would first repay the government for any benefits provided.

Proper planning would protect those with known needs and those who may have them later. You would choose the person or persons to manage the money for the beneficiary with no loss of benefits.

Additionally, any money remaining at the death of the primary beneficiary goes to whom you direct. The money can be used as you direct, liberally, or conservatively, for certain things and not others. Your money, your rules.

The Supplemental Needs Trust would be created at your death, or after the second death for couples. The trust assets can be used to provide luxuries for the disabled individual he/she would not otherwise receive under the state and federal programs.

Things or items that are deemed supplemental to necessities are… luxuries can include vacations, clothing, transportation, education, caregiving, computers, power wheelchairs, prosthetics, or other comforts not generally provided by the government benefits.

Do not put those who have special needs or have disabilities in danger, provide them proper protection.