Each family has a different dynamic, and this is something to take into consideration when you are planning your estate. With this in mind, if you have someone with a disability in your family you may want to consider the creation of a special needs trust.
We would like to explain the value of a special needs trust by way of a simple example. Suppose you have a family member who has a disability. You want to provide something for this individual when you’re planning your estate.
Because of the fact that you haven’t looked into the matter very deeply, you decide to execute a last will and name this person in the will along with everyone else.
A high percentage of people who have special needs are dependent on government benefits to pay for medical care and treatment and provide a small income. These generally come in the form of Medi-Cal and Supplemental Security Income.
These programs are not available to everyone. They are needs-based programs, so your assets must remain within certain prescribed limits if you want to qualify. The upper asset limit for Medi-Cal eligibility is just $2,000.
Depending on the disability in question, it can cost literally millions of dollars to provide a lifetime of care. This is a benefit that simply cannot be easily replaced even if someone inherits some money.
When this person receives the bequest, he or she will suddenly have more than $2,000 in assets, and this could render your relative ineligible for these much-needed government benefits.
This is where special needs trusts are so valuable. A special needs trust, also called a supplemental trust, can provide access to assets to the beneficiary without hindering his or her benefit eligibility. You name a trustee when you create the trust, and this trustee can make assets available for certain approved purposes.
There are websites on the Internet that sell do-it-yourself estate planning notions. They are essentially fill-in-the-blanks worksheets and downloads.
If you simply use one of these tools to create your own last will, you may wind up making a mistake that is very costly for people that you care about. This could certainly be the case if you use a last will to leave a significant inheritance to someone with a disability who is relying on government benefits.
This is a brief, surface explanation of special needs trusts. If you would like to learn about them in greater detail, our firm can be of assistance. We have compiled a rather extensive library of free special reports on various different estate planning topics, and we are offering access to our report on special needs trusts.
You like access your copy of the report click this link: California Special Needs Trusts.
We also regularly offer free Special Needs Trust workshops. To view a list of our upcoming seminars and to reserve your seat(s), follow this link: Free Seminars and Workshops
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