The Importance of Estate Planning for Special Needs Families

It can take a lot of money to give those with special needs the support they need.

Thankfully, there are many government programs that help families out with this cost, such as Supplemental Security Income (SSI), Medicaid, and low-income housing.

But if you pass away and leave a large sum of money to a family member with special needs, that might disqualify them from receiving benefits from those programs.

This is why estate planning is so important for special needs families, By using financial tools such as special needs trusts, you can leave money to a family member without disqualifying them from the programs they need to live comfortably.

Special Needs Trusts: The Basics and The Benefits

A trust is an arrangement where the property of one person (the beneficiary) is managed by another person (the trustee). Special needs trusts provide unique benefits for the disabled and mentally ill. This trustee can be a family member or some other trusted individual who will be responsible for administering all aspects of the trust, particularly the dispersal of funds to the beneficiary.

If you leave assets directly to a special needs family member in your will, and those assets will count toward that family member’s income, which might push them over the income threshold of certain government programs.

But if you leave those assets to your family member through a trust, it doesn’t count as income. Thus, when properly executed, there is no chance that their inheritance will prevent them from receiving benefits.

Keep in mind, the trustee cannot just give money from the trust directly to the beneficiary—this would count as income. Instead, the trustee must themselves buy what the beneficiary needs, whether it’s food, physical therapy, medicine, or anything else, and provide it to them.

Other Aspects of Special Needs Estate Planning

In addition to matters of money, you need to decide who is going to look after your special needs family member when you’re gone.

This is an especially important process if the special needs family member is a child. Discuss this issue with your attorney. Identify family members and other candidates who are well-suited to handle this responsibility, and meet with them to discuss everything that guardianship would entail.

Having a detailed plan will provide you with peace of mind, and it will ensure that your special needs loved one is well taken care of.

If you are interested in setting up a special needs trust, or need assistance in any other aspect of special needs planning, please contact the Legacy Planning Law Group and let us guide you throughout the process.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.