The government is a major source of income for many people who have special needs. These include a child born with a physical or developmental impairment or someone who has become incapacitated.
If you are the primary caregiver for a loved one in this type of situation, you should consider how their needs might be met if you can no longer be there. For example, you would not want the person to receive an inheritance in a way that makes them ineligible to receive government benefits.
One estate planning tool worth considering is a special needs trust. This tool comes in many forms, and each state has its own laws regarding their use. You may be put off by their complexity, but the financial and legal benefits of a special needs trust can outweigh any burden of setting one up. The goal of these types of trusts is to supplement the government benefits for your loved one, not replace them.
Benefits of a Special Needs Trust
A special needs trust can be an essential tool for your loved one. Below are some advantages to consider or discuss with your estate planning attorney:
- It can help your loved one remain eligible for government programs, such as Medicaid or SSI, and help provide for additional services and care.
- Funds used to create a special needs trust are tax-deductible.
- The trust will ensure that the funds are used for your loved one.
- The funds will not be available to creditors.
Whether your situation is relatively simple or significantly complicated, the objectives you want to meet require a deep understanding, a clear plan, and a proper legal construct. Don’t settle for a one-size-fits-all special needs trust. A TuckerAllen attorney experienced in special needs planning can help you establish a trust that will be customized to your loved one’s special needs.