Why include a special needs trust in your estate plan?

On Behalf of | Jun 21, 2023 | Estate Planning |

Estate planning is a crucial process allowing individuals to help protect their assets and ensure their wishes are fulfilled. If you’re currently working on your estate plan, you may wonder if you should include a special needs trust. A special needs trust, also known as a supplemental needs trust, is a legal instrument designed to safeguard the financial future of an individual with disabilities. 

Its primary purpose is to support special needs individuals without jeopardizing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI). By establishing a special needs trust, you can allocate funds for the care, comfort and quality of life of your loved one with special needs. Suppose you have a family member with special needs; here’s how a special needs trust will help cater to them.

Preserving their inheritance

Without a special needs trust, leaving a direct inheritance to a special needs individual can potentially disrupt their eligibility for government assistance programs. In such cases, they may be required to exhaust their inheritance before qualifying for benefits again. By establishing a special needs trust, you create a protective mechanism that helps safeguard the inheritance while allowing your loved one to maintain their eligibility for crucial support.

Government benefits are vital in providing essential assistance and healthcare services for individuals with disabilities. However, these benefits often have strict income and asset limits. By utilizing a special needs trust, you can ensure that your loved one continues to receive these benefits while also benefiting from the assets you leave behind.

Professional management

Managing finances can be challenging for individuals with disabilities. A special needs trust enables you to appoint a trustee who will handle the financial affairs of your loved one, helping ensure responsible management and allocation of funds. Knowing that your loved one’s financial well-being is in capable hands can promote peace of mind.

Supplementing government benefits

While government benefits cover essential needs, they may not provide the full range of support required by individuals with special needs. A special needs trust allows you to supplement these benefits by allocating funds for additional expenses, such as education, therapy, medical treatments, recreational activities and specialized equipment.

By learning your legal options you can incorporate a special needs trust into your estate plan as a proactive and compassionate step to help secure the financial well-being of your loved one with special needs. By preserving their inheritance and providing supplementary support, a special needs trust helps ensure their long-term care and can enhance their quality of life.