Special Needs Trust
This month, though very related to Medi-Cal Trusts in its practice, let’s talk about a subject that affects a different portion of our community – the person living with a physical or mental disability. Things as simple as going into a pool without assistance, getting into a car with simplicity, and other simple things of life we unfortunately often take for granted are very difficult to impossible for many people. If you have a loved on in your life who lives with a physical or mental disability and you worry about how they will be provided for as life goes on the answer might lay in a custom Special Needs Trust.
If you want to leave money or property to a loved one with a disability, you must plan carefully, otherwise, you could jeopardize your loved one’s ability to receive Supplemental Security Income (SSI) and Medicaid benefits.
By setting up a “special needs trust” in your will, you can avoid some of these problems.
Owning a house, a car, furnishings, and normal personal effects does not affect eligibility for SSI or Medicaid. But other assets, including cash in the bank, will disqualify your loved one from benefits. For example, if you leave your loved one $30,000 in cash, that gift would disqualify your loved one from receiving SSI or Medicaid.
A way around losing eligibility for SSI or Medicaid is to create what’s called a special needs or supplemental needs trust. Then, instead of leaving property directly to your loved one, you leave it to the special needs trust. Don’t kid yourself, the government will run an assets check prior to awarding benefits. So, plan carefully.
What benefits can a Special Needs Trust provide for a family member? It enables parents/siblings to provide funds for a disabled child without losing that child’s eligibility for governmental aid. Chances are that a child with a severe disability would have a much harder time finding employment in today’s “corporate” world. If that is the case, then the parents are thankfully present to provide for that child financially and emotionally. But consider, how does one prepare for the day when you will not be able to provide in such manner? This is where the Special Needs Trust can help ease your mind.
If you or someone you know needs to create such a legal instrument, here are some of the issues you should seriously think about before contacting a trust attorney:
Who is going to be the guardian for that child/adult? Think about who is will fill-in the role of Trustee to manage that person’s assets and supervise his / her financial needs. The Trustee and Guardian need not necessarily be the same person
It is crucial that you leave detailed information outlining your wishes and desires in regards to that child’s /adult’s education, housing, personal and emotional needs (like travel and entertainment) so give these areas all due deliberation. No template trusts will do here, you must take the time to outline these life goals, aspirations, and personal needs for that child/person.
These are just some of the factors you will need to address when dealing with a Special Needs Trust. For a more detailed discussion please read the article about Special Needs Trusts at http://www.nsnn.com/Why_A_Special_Needs_Trust.htm