If you want to leave money or property to a disabled child or loved one, you face several practical challenges. For instance, in passing along assets, you could jeopardize his or her Supplemental Security Income (SSI) and Medicaid benefits. For the most part, if the disabled person has more than $2,000 of assets, they will be ineligible for essential government benefits. Fortunately, effective, proactive estate planning can solve this problem.
Setting up a Special Needs Trust (SNT) – sometimes called a Supplemental Needs Trust – enables beneficiaries to obtain and use assets that the government will not count when assessing eligibility for SSI and Medicaid. There are two basic types of SNTs-typically referred to as a first party SNT when utilizing the disabled person’s assets or a third party SNT when using the assets of someone other than the disabled person.
Instead of giving funds directly to your loved one, you put them in the Special Needs Trust. The Trustmaker names someone to function as trustee, who will be in charge of spending funds on the beneficiary’s behalf. Since your loved one doesn’t have control over the money, SSI and Medicaid don’t consider those assets when determining program eligibility. The trust ends at the beneficiary’s death or at the point when the funds are gone.
Although trustees can’t give money directly to beneficiaries, they can use the funds in the trust to purchase a wide spectrum of goods and services. Trustees typically use the money to pay for “special needs” such as dental expenses, personal care attendants and physical rehabilitation. In addition, they can also use the funds for non-essentials like vacations, home furnishing, recreation and education.
You don’t absolutely need a lawyer to create a Special Needs Trust, but a qualified attorney can make the process easier, answer questions you have and prevent costly, hard-to-fix mistakes. Call the experienced estate planning attorneys at Gudorf Law Group for strategic guidance at 1-937-898-5583 today. We offer thorough, free consultations.