Special Needs Trust

We all know at least one family who has a member with a disability or some sort of condition that may require the family member to receive government benefits for their daily support. Or maybe there is a child who has difficulties with addictions or just cannot manage financial assets in a responsible way.

What do you do when preparing an estate plan that will include a disabled person or a person who cannot manage financial assets?

Even a small inheritance can interfere with a person’s ability to receive government benefits they depend upon for their very survival and the influx of money and assets could possibly cause them to have to spend most of their inheritance before reapplying for continued assistance.

Many government programs are “means-tested”, which means that the recipient is allowed to possess only a certain level of assets or income before losing their eligibility. However, with proper estate planning, those issues can be addressed, and measures can be taken to prevent the loss of benefits from occurring.

Special Needs Trusts (also called Supplemental Needs Trusts) and ABLE Accounts are tools that your local estate planning attorney can use to help you realize your goals in leaving an inheritance to a child or spouse who has special needs. Special/Supplemental Needs Trusts are written to limit the release of funds or assets to a disabled person.

This limited receipt of funds and assets means that the government will likely not count them as part of the beneficiary’s net worth. Therefore, the benefits should continue for them without interruption.

Check with your local estate planning attorney to see what can be written to preserve and protect your family member’s inheritance should they need special assistance in life. You will have peace of mind in knowing that you have done everything possible to make a comfortable life for your beneficiary.