Caring for a loved one with special needs involves more than just day-to-day support—it also requires long-term planning. One of the most important aspects of this planning is ensuring they can receive an inheritance or financial support without losing eligibility for government benefits like Supplemental Security Income (SSI) or Medicaid.
The Risk of Disqualification
Both SSI and Medicaid have strict income and asset limits. If a person with special needs inherits a lump sum of money through a will or is given assets outright, it could push them over these limits, causing them to lose access to vital benefits. This would mean they no longer qualify for healthcare coverage, housing assistance, or monthly income.
Losing these benefits could be devastating. Public benefits often provide the foundational support that individuals with disabilities rely on for basic necessities like medical care and housing. That’s why it’s essential to plan carefully, ensuring that any financial support you leave doesn’t inadvertently disrupt their eligibility.
The Role of a Special Needs Trust
A Special Needs Trust is a valuable tool to avoid this problem. This trust holds assets on behalf of a loved one with disabilities without those assets being counted against the person’s eligibility for public programs. The trustee—who is chosen by you—distributes funds as needed for the beneficiary’s supplemental needs, such as:
Creating a Long-Term Plan
The first step in establishing a Special Needs Trust is working with a knowledgeable attorney who understands both estate planning and the specific rules that govern SSI and Medicaid. Together, you can craft a comprehensive plan that includes selecting the right trustee, funding the trust through life insurance or other assets, and ensuring all legal requirements are met.
In addition to the trust, your estate plan should include a healthcare directive to provide holistic care for your loved one. This ensures their physical, emotional, and financial needs will be met, both now and in the future.
Planning ahead with a Special Needs Trust gives you peace of mind, knowing that your loved one will be protected and supported even when you are no longer there to provide direct care.
The Risk of Disqualification
Both SSI and Medicaid have strict income and asset limits. If a person with special needs inherits a lump sum of money through a will or is given assets outright, it could push them over these limits, causing them to lose access to vital benefits. This would mean they no longer qualify for healthcare coverage, housing assistance, or monthly income.
Losing these benefits could be devastating. Public benefits often provide the foundational support that individuals with disabilities rely on for basic necessities like medical care and housing. That’s why it’s essential to plan carefully, ensuring that any financial support you leave doesn’t inadvertently disrupt their eligibility.
The Role of a Special Needs Trust
A Special Needs Trust is a valuable tool to avoid this problem. This trust holds assets on behalf of a loved one with disabilities without those assets being counted against the person’s eligibility for public programs. The trustee—who is chosen by you—distributes funds as needed for the beneficiary’s supplemental needs, such as:
- Personal care attendants or specialized therapy
- Transportation, including purchase and maintenance of a vehicle
- Medical treatments and dental care not covered by Medicaid
- Vacations, entertainment, or cultural activities
- Home modifications or assistive technologies
Creating a Long-Term Plan
The first step in establishing a Special Needs Trust is working with a knowledgeable attorney who understands both estate planning and the specific rules that govern SSI and Medicaid. Together, you can craft a comprehensive plan that includes selecting the right trustee, funding the trust through life insurance or other assets, and ensuring all legal requirements are met.
In addition to the trust, your estate plan should include a healthcare directive to provide holistic care for your loved one. This ensures their physical, emotional, and financial needs will be met, both now and in the future.
Planning ahead with a Special Needs Trust gives you peace of mind, knowing that your loved one will be protected and supported even when you are no longer there to provide direct care.
RSS Feed