If you have a loved one with special needs, you need to tailor your estate plans accordingly to ensure they will be well taken care of when you are gone. It means looking beyond a traditional will. Here is why.
A lot can go wrong with a will. Your loved one may lose their inheritance to mismanagement or creditors should they default on a debt. Also, leaving them assets through a will could make them ineligible for government aid programs like Medicaid or Social Security Insurance benefits.
Owing to these and other reasons, you should strongly consider having a special needs trust. Think of it as killing two birds with one stone. With this kind of trust, you will enjoy the asset protection capabilities of trusts and financially provide for your loved one with special needs without disqualifying them from government support programs.
How special needs trusts work
The setup for a special needs trust is similar to other kinds of trusts. A trustee holds or manages the trust assets on behalf of a beneficiary. However, special needs trusts are created and administered under strict legal requirements, which sets them apart.
First, a special needs trust is irrevocable, meaning it cannot be changed or revoked once established. Additionally, the trust is structured in a way that the proceeds can only be used to cover certain expenses for your loved one, which will not affect their eligibility for government support programs.
Get the appropriate assistance
Special needs trusts can help your loved one live a happy and fulfilling life. However, you ought to do everything right from the word go. Legal issues like improperly funding the trust or mistakes when creating it can throw your plans in disarray, and it may be too late to do anything about it.
Therefore, having qualified legal guidance when creating such a trust is highly advisable. The necessary assistance will ensure you do everything by the book and help avoid anything that could jeopardize your loved one’s interests.