Special Needs Trust
There are special needs trust options, but you must ensure that they do not restrict the recipient’s access to public benefits.
For instance, you may designate assets for the person with special needs directly in your estate plan, but you would need to make sure to account for the possibility of losing that person’s benefits. If the contribution is sizable, it might in some situations be enough to support the recipient even if they stop receiving government assistance. To guarantee that the advantages are still accessible should they be required, this circumstance should be avoided if at all possible.
Even if the donation is enough to make up for the lost benefits, it may be appropriate to set up a living trust to manage the handicapped person’s finances and lessen the chance that someone may take advantage of the person with special needs. Additionally, by choosing this option, siblings or other family members may eventually inherit the possessions the disabled individual cannot utilize. This solution can be suitable for someone who has a limited lifespan.
Another option for a special needs trust is to give the disabled person’s share of the estate to a family member, such as a sibling, to manage on their behalf. The risk in going with this option is that the third party might not use the assets for the disabled person or might be persuaded to do so by someone else, like a spouse or child. Additionally, if not executed with care and complete openness, this method might be perceived as a fraud on Medicare or SSI, leading to a variety of unfavorable outcomes.
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For guidance on guardianship, consult with a qualified elder law attorney in your area. For more information, go to Hudack Law Estate Planning Attorney and areas of service. We proudly serve California and Arizona; please call our California line at (877) 314-4309 or our Arizona line at (602) 777-7882.