Special Needs Planning

If you want to include someone with special needs on your inheritance list, you have to take measured steps to proceed in the correct manner. In most cases, the dynamic is not the same as it would be with someone that is not living with any particular physical challenges. This is because many people that have special needs are enrolled in government programs that are important to them.

Medicaid is a source of health care insurance that is relied upon by a very significant percentage of individuals with disabilities. This is a jointly administered federal/state government program that is only available to applicants with limited financial resources. Since many people with special needs are not in a position to work, they qualify for Medicaid.

Supplemental Security Income is a source of limited financial assistance for disabled individuals. Once again, this is a need-based program that is not available to people that have a significant store of financial resources and/or a stream of income that is derived from a different source.

You could provide financial assistance to a loved one that is relying on these programs through the creation of a supplemental needs trust. These vehicles are sometimes called special needs trusts. If you utilize your funds to establish this type of trust, it would be a third-party supplemental needs trust.

An individual or entity of your choosing would act as the trustee, and the person that you want to help would be the beneficiary. The government benefits do not cover certain needs that are looked upon as “supplemental needs,” and this is where the name of the trust comes from. The trustee would be empowered to utilize funds that you have conveyed into the trust to satisfy the supplemental needs of the beneficiary. These expenditures would not impact government benefit eligibility.

When a third-party special needs trust has been established, the Medicaid program will not seek reimbursement from assets that remain in the trust after the death of the beneficiary.

In some cases, a person with a disability will receive funds from a personal injury settlement or some other source. Under these circumstances, a parent, a grandparent, a guardian, or a court could establish a first-party supplemental needs trust for the beneficiary using these funds. The same dynamic would exist with regard to the ability of the trustee to use the assets to make the beneficiary more comfortable in certain ways.

However, after the passing of the beneficiary, Medicaid would be able to attach assets that are left in the trust to obtain reimbursement for monies spent.

Learn More About Special Needs Planning

If you take the right steps, you can make a loved one with special needs more comfortable without doing any harm in the process. We would be glad to help you put a plan in place, and you can take the first step if you give us a call at 570-270-6524.