Careful planning is needed when planning to leave property or money to a person living with a disability. If your loved one receives government assistance, such as Supplemental Social Security Income or Medicaid benefits, receiving an inheritance could negatively impact their benefits. A Special Needs Trust is a strategic move when a person with a disability is a logical heir.
Physical property (real estate, personal belongings, jewelry, vehicles, etc.) may not sometimes be factors in a person’s eligibility for Supplemental Social Security, Medicaid, or other government assistance. However, money in the bank can be a disqualifier. Therefore, planning for your disabled loved one should be done with care.
A Special Needs Trust is basically a safe place for your money to be held for the disabled individual. The money/property is legally willed, or placed during lifetime, to a trust that has been established for your disabled family member. Because your disabled loved one has no direct control over the money, their government benefits will not be affected. You can also choose a trustee to act on behalf of your disabled loved one. The trustee will have access to the Special Needs Trust, and can spend the funds on behalf of the beneficiary. The Special Needs Trust will exist until all the funds have been used, or at the death of the beneficiary.
Special Needs Trust Trustee
While the trustee of the Special Needs Trust is prohibited from giving money directly to your disabled loved one, the trustee can spend the funds on a wide variety of products or services for the beneficiary. Special care services, travel, personal medical expenses, dental expenses, personal development, special vehicles, or physical rehab can all be funded through the Special Needs Trust.
There are times when it is difficult to find an exceptional individual to serve as a trustee. In this scenario, you may want to consider a Pooled Trust. A Pooled Trust can also be an option when you may be leaving a rather modest monetary amount. A Pooled Trust is governed by nonprofit organizations. These groups “pool” together money from multiple families with similar situations, and invest the funds on behalf of the beneficiary. Each Trust has a separate account in which the nonprofit group designates a trustee to act on behalf of your loved one. This type of trust is also known as a Community Trust, and are available in many locations across the country.
Working with an attorney who is knowledgeable in the area of Special Needs Trusts or Pooled Trusts offers a level of security and reassurance for a plan of this nature. The right Estate Planning attorney can help you anticipate roadblocks that may exist for your disabled loved one. Also, an attorney can assist when planning for a disabled loved one that may have funds from a personal injury settlement. This type of settlement can pose many different questions when planning for your loved one. The services provided by an attorney in the planning process will offer valuable peace of mind that you did the right thing for your loved one.
