Legal Planning for the Elderly

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Special Needs Planning

special-needsDo you need a Special Needs Trust?

Most people believe the following are your only choices with respect to your estate planning for a family member with a disability:

1. Disinheritance. This is not a good choice, even if your estate is small, because of the emotional difficulty in disinheriting the one child who needs your help the most and the potential of offending your child. Also, even if your child has only minimal needs, such needs will still likely be met by public benefits.

2. Gift to the family member with a disability. The problem is that the gift from you may disqualify your family member from public benefits. The medical benefit also may be worth hundreds of thousands of dollars over your family member’s life.

3. Distribute your assets to Siblings. Many people believe that making a distribution to a sibling, with the understanding that they will take care of the family member with a disability is a wise choice. However, this is not a good idea because such assets may be subject to creditors of that sibling. Also, they may be claimed in a divorce action of the sibling, or there is always the possibility of such asset being misappropriated or mismanaged.

4. Support Trust. Often times an inexperienced lawyer may suggest a support trust for the benefit of a family member with a disability. This is not a good idea because these trusts are considered “available” for public benefit purposes and therefore disqualify the family member with a disability from receiving public benefits.

The Solution: A Special Needs Trust

Why Special Needs Trusts are Important: 
The primary advantage of Special Needs Trusts come from their preservation of eligibility for public benefits such as Supplemental Security Income (SSI), and Medicaid. By using such a trust, the family member can retain public benefits and also enjoy the assets left by the family. Or in the case of an individual with a disability who received lawsuit proceeds or an inheritance- the Special Needs Trust will also preserve eligibility for public benefits.

Even if public benefits are never needed, which is quite rare, Special Needs Trusts help to promote independence living and enhance the family member’s quality of life in various ways by providing guidance to future trustees.

Reasons for establishing a Special Needs Trust 
In addition to preserving public benefits and assisting to promote independent living, the benefits to Special Needs Trusts include: Control of trust assets; Protection from friends; Protection from spouses; Protection from creditors; Professional money management; and Professional legal advice.

The single best opportunity to enhance the quality of life for a person who may depend on Medicaid or other public benefits is accomplished by family members or friends planning in advance to leave available funds in a Special Needs Trust. 

At Northland Elder Law we are committed to providing quality legal assistance to individuals with Special Needs to protect their assets and ensure that each person receives the public assistance benefits to which they are entitled.

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