We suggest you consider including special needs planning language in your estate plan in the event that a loved one such as a child, grandchild, or parent, at some point, qualifies for governmental benefits because of a special need. If assets flow to a beneficiary who qualifies for benefits, he will be disqualified until all of your money has been spent down, wasting your gift.
When you include special needs planning in your trust, you instruct the trustee to distribute assets that will supplement, as opposed to supplant, government benefits. That being said, there may come a time when it’s in your beneficiary’s best interests to use trust assets even if disqualification occurs. Having this language in your living trust means you give the trustee the power to make good decisions at that time.
So long as your beneficiary doesn’t have “demand rights” – the right to demand that the trustee distribute assets – he can receive Medicaid and Supplemental Security Income (SSI) in addition to trust benefits such as trips, special events, and excellent care.
If a special need has already been identified, we can assist in creating a freestanding special needs trust. We’ll help you identify what kind of special needs planning works best for your family and how to ensure your loved one is cared for without wasting hard-earned assets.