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Estate Planning For Special Needs Individuals

Estate planning is crucial for everyone, but it holds particular significance for families with special needs individuals. Proper planning ensures that these individuals receive the care and support they need throughout their lives, even after their parents or caregivers are no longer able to provide for them.

A skilled estate planning lawyer can guide you through options available if you have a special needs child or are the guardian of a special needs adult, including options for financial support. Our friends from Carpenter & Lewis PLLC, outline some of the more common estate planning strategies for guardians of people with special needs.

Understanding The Challenges

Special needs individuals often rely on government benefits such as Supplemental Security Income (SSI) and Medicaid for crucial support services, including healthcare, housing, and personal assistance. These benefits are means-tested, meaning eligibility is based on financial need. A well-meaning inheritance or gift could jeopardize their eligibility for these vital benefits if not structured correctly.

Special Needs Trusts

One of the most important tools in estate planning for special needs individuals is the Special Needs Trust (SNT). This trust is specifically designed to supplement, not replace, government benefits. Assets held in the trust are not considered countable resources for means-tested benefit purposes, allowing the individual to maintain eligibility.

Key Features Of A Special Needs Trust:

  • Trustee Selection: Choosing a trustee who understands the beneficiary’s needs and is capable of managing the trust responsibly is crucial. This could be a family member, friend, or professional trustee.
  • Discretionary Distributions: The trust should allow distributions for supplemental needs such as recreation, travel, therapies, and other quality-of-life enhancements without impacting benefit eligibility.
  • Protecting Inheritance: Assets placed in the trust are protected from creditors and ensure that the intended use of funds aligns with the beneficiary’s needs and wishes.

Legal Considerations

Creating a Special Needs Trust may be more complex than establishing other types of trusts. It’s essential to work with an experienced estate planning attorney who can:

  • Ensure the trust document complies with state and federal laws governing SNTs
  • Integrate the SNT with other estate planning documents, such as wills and powers of attorney, to provide comprehensive support
  • Consider the beneficiary’s long-term care needs, healthcare decisions, and potential changes in government benefits over time

Government Benefit Preservation

Preserving eligibility for government benefits requires careful planning. A well-drafted Special Needs Trust ensures that the beneficiary can continue to receive essential services while enjoying a higher quality of life funded by trust assets.

By creating a Special Needs Trust and working with knowledgeable estate planning lawyers, families can ensure that their loved ones continue to receive necessary care and support throughout their lives while protecting their eligibility for critical government benefits. Planning early and regularly updating the estate plan as circumstances change are key to achieving long-term financial security and peace of mind for all involved.