If you have a loved one who suffers from a physical or mental disability, then you’re probably worried about their future, especially if you provide them with a lot of support. This consideration should definitely be taken into account as you create your estate plan. While some people think that they can simply leave money to their disabled loved one to help support them in the long-term, this strategy might actually be detrimental to your loved one because it could affect his or her eligibility for government programs like Medicaid and Supplemental Security Income.
Is a special needs trust right for you?
A special needs trust might help you both financially support your loved one while at the same time protecting their eligibility for those government programs. To be most effective, the assets in this kind of trust should only be used for things that are not counted for government program eligibility purposes. This includes a primary residence up to a certain value, a vehicle as a primary mode of transportation, personal effects, and furnishings for the home. This might seem rather restrictive, but there’s actually a lot of leeway that can be garnered here.
Things that you want to avoid in a special needs trust include retirement accounts, investment accounts, bank accounts, and cash. These assets will certainly count when it comes to qualifying for Medicaid and Supplemental Security Income, so you’ll want to be careful here if you hope to protect your loved one’s interests in those benefits.
Don’t let a generic estate plan put your loved one’s at risk
A lot of people turn to Internet resources or the cheapest attorney they can find to create an estate plan. These plans are usually very generic in nature. While this might provide you with some protection, it doesn’t give you the custom-tailored approach that you need to fully protect your interests, as well as those of your estate and your loved ones. So, if you’re interested in creating an estate plan that is best for you and your vision of the future, then it might be time to speak with an estate planning attorney who is right for you.