One thing about estate planning that many people often fail to understand is that there is more to it than just ensuring a smooth distribution of property when you die. If you have dependents who rely on you for their care, then you know that one of the most important things that you can do is to plan ahead to ensure that your loved ones are cared for when you’re gone. This can be especially important for dependents with special needs, since their care after your death usually requires something more than just leaving them a sizable sum of money. Special needs planning can help to ensure that those loved ones receive the ongoing help they need to maintain a stable quality of life even when you’re no longer there to provide it.
Why Traditional Estate Planning Might Not Be Enough
When you’re caring for someone with a physical disability, developmental challenges, or other special needs, there are a wide variety of issues involved. There are legal worries, medical issues to be dealt with, and financial costs that must be considered. In many instances, these concerns must be addressed in an ongoing manner throughout the disabled individual’s life – and that can represent a real challenge when you’re trying to use your estate planning to provide lifelong care for that loved one.
With traditional estate planning options, however, there often isn’t enough flexibility to ensure that the care you attempt to provide doesn’t end up doing more harm than good. Take your Last Will and Testament, for example. If you simply leave that loved one a tidy sum of money, you could place his or her benefit eligibility at risk. And if your loved one has medical needs that are being paid for by those benefits, then it is likely that the inheritance you provide will simply be consumed by those costs.
The issue of benefit disruption is one of the most perplexing problems many people face when they are trying to devise an estate plan that can help their disabled loved ones enjoy a better quality of life. Since government benefits are usually tied directly to income and assets, any beneficiary who receives an inheritance or other windfall may find those benefits cut off. For an individual with special needs, that can prove more than a little problematic. At the very least, the government would seek to acquire that inheritance to offset the benefits it has provided.
From your perspective, that type of outcome should be something you’d like to avoid. When you leave your heirs with an inheritance, your goal is to pass on a legacy that can help to make their lives a little bit better. When that heir is someone with special needs, you are usually also trying to ensure that he or she is able to enjoy the type of lifestyle that you provided while you were alive. If the inheritance that you leave gets consumed by medical costs or other expenses, then your efforts will accomplish none of your planning goals.
Can a Special Needs Trust Solve That Problem?
Your main goals in planning for a disabled heir or anyone with special needs should be focused on providing them with stability and something resembling the quality of life you provided while you were alive. At the same time, you need to do that in a way that doesn’t interfere with any benefits they might currently be receiving. Programs like Supplemental Security Income (SSIS) and Medicaid can be vital for helping people with special needs, so any inheritance you leave behind has to avoid any impact on benefit eligibility.
Still, those programs don’t always provide all of the assistance that your loved one might need. That’s where a Special Needs Trust can help. Rather than simply provide your heir with a lump sum of money or a piece of property that might destroy benefit eligibility, you can instead create a trust that will provide supplemental assistance for your heir. That assistance could include a variety of services that those other programs don’t cover, such as:
- Educational or tutoring needs
- Dental and medical procedures not covered by Medicaid policies
- Vehicles and maintenance care
- Vacations or recreational activities
- Home furnishings
- Entertainment needs
- Communications devices like computers and phones
- Dietary needs
- Other non-essential needs that government programs do not cover.
With the right kind of Special Needs Trust, you can establish a legacy fund for your loved one that will be there when he or she needs these or other services and benefits that government programs won’t provide. Your trustee can oversee the distribution of funds, and do so in a way that ensures that important benefits won’t be disrupted in any way.
Other Options Might Be Available Too
An experienced estate planning attorney can help to guide you through the special needs planning process to determine which options will work best for meeting your planning goals. Ultimately, the form that any special needs planning takes will be dependent upon the disabled person’s unique circumstances and the level of care and support you are intent on providing. Your lawyer will be able to help with the creation and funding of any trust, the appointment of a trustee, and other important considerations that factor into the success of your planning efforts.
The estate planning experts at Fouts Law Group, LLC have the experience you need to ensure that your special needs planning efforts accomplish all of your objectives. We understand how important it is that your plan be created in a way that protects your loved one’s access to critical government benefits, and our strategies are designed to help you maximize the support you provide without disrupting that eligibility to vital programs. We’ll work with you to develop a comprehensive plan that can help your loved one enjoy the quality of life he or she deserves, and leave you with the peace of mind that comes from knowing that your heir will be properly cared for when you’re gone. To find out more about how we can help you with this important area of planning, contact us online today or call us at (678) 242-8344.
