Many people put off estate planning. There are many reasons for their procrastination, but a lot of it boils down to a discomfort with thinking about death. This is understandable, but by neglecting your estate plan you could be putting your loved ones at risk of having the financial stability they need in the future.
This might be particularly true if you have a loved one who has special needs or requires specialized medical treatment. This is because simply inheriting money from you could render them financially ineligible from receiving government benefits that could do a lot of the heavy lifting when it comes to paying for their future care and treatment.
Estate planning can help you with this issue. A special needs trust is an estate planning tool that can better ensure that your loved one maintains government benefits while still receiving additional financial support from your estate. This type of trust is irrevocable, meaning that once assets are put into the trust they cannot be taken out, which might leave you uncertain, but there are many benefits to this type of trust.
To start, the assets passed down to a loved one through a special needs trust are not considered income for the purpose of determining government benefit eligibility. Therefore, utilizing this type of trust better ensures that your loved one can maintain his or her Social Security disability benefits, Supplemental Security Insurance benefits, Medicaid benefits, or Medicare benefits. There are limitations on how trust assets can be used, though, but they still can prove enormously beneficial to your loved one.
Another benefit of a special needs trust is that it can’t be reached by creditors and judgments. Therefore, if you pass away with debt, your loved one doesn’t have to worry about the special needs trust’s assets being raided to pay off those debts.
This is just one way that you can better ensure that your loved ones are cared for once your gone. We know this can be a challenging topic to address, but we find that those who engage in the estate planning process actually end up relieved once they’ve got something in place. Therefore, if you want to take the steps necessary to ensure that your loved ones are taken care of as fully as possible under the circumstances, consider discussing your vision of the future with your estate planning attorney.