There are numerous benefits and reasons why someone with a physically or mentally disabled child should create special needs trust. There are scenarios in which having too much money or assets causes more issues than it solves.
An example of this is when someone needs Medicaid to pay for long-term health care. They possess too many assets to qualify, but they don’t have enough money to pay for a nursing home. A special needs trust could help.
Another example would be the special needs child (or adult) who receives an inheritance that makes them ineligible for government assistance. That could come in the form of Supplemental Security Income (SSI) or Medicaid. Many people with disabilities live in homes with live-in help, and others can utilize subsidized housing.
All of which could be jeopardized by improper estate planning.
The Benefits
If you have a child who lives in a group setting or home, a special needs trust will hold their inheritance for them. The money in the trust will not disqualify them from any assistance they were receiving. In addition, the trustee can distribute their money to them periodically. It can be enough to support them without causing the undue hardship that may come with the loss of governmental assistance.
Because you will have to appoint a trustee to manage the trust, you will have someone looking out for your child in your absence. With that in mind, choose the person who best fits this role. They will be the person responsible for distributing the assets in the trusts according to your wishes.
Asset Protection
When you meet with an estate planning attorney, you will learn that a trust is a powerful tool for asset protection. Different types of trusts offer varying degrees of protection. By explaining your specific needs, your attorney can advise you on how to proceed.
A special needs trust can protect your assets. If your child is ever the focus of a lawsuit, their assets cannot be taken. The same goes for if they ever marry and get divorced. The assets that are in the trust belong to the trust, not your child. Therefore creditors and former spouses will not have a legitimate claim to them.
Elder Advisors Law
Most people understand black-letter law—broad topics. The lawyers at Elder Advisors Law understand far more than the black letter of the law. By meeting with us, we can give you an asset protection analysis. This explains which assets are at risk without proper estate planning. Then we quantify (in a percentage) how much we can protect by working with us.
Contact Elder Advisors Law to schedule a consultation or reserve a spot at one of our complimentary workshops.
Elder Advisors Law
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