Doing things on your own can be rewarding on a personal level. It can also save you money under the right circumstances. However, biting off more than you can chew can actually wind up creating a disaster. With this in mind, let’s look at Medicaid (which is called Medi-Cal in California) , SSI, and special needs trusts in Campbell California.
A Hypothetical Scenario
Let’s say that you buy into the sales pitches that you see online. You accept the premise that anyone can act as his or her own attorney by using generic, fill in the blanks legal documents.
Like most people, you are aware of the fact that a last will in California can be used to arrange for the future transfer of your financial assets. You pay the price and download a last will template.
There is someone in the family who has a disability. You want to provide for this person, so you name the individual in your will.
You breathe a sigh relief after you have filled in all the blanks, secure in the knowledge that you have provided for all of the people that you love.
Medicaid and Supplemental Security Income (SSI)
The person that you are leaving a bequest to is enrolled in the Medicaid program. She is receiving care and treatment that costs tens of thousands of dollars per year. She is also receiving monthly income through the Supplemental Security Income program.
These are need-based programs for people with virtually no financial assets. When the direct inheritance is received via the terms of the last will, the recipient will no longer have the same level of financial need. As a result, these much-needed benefits could be lost.
Special Needs Trusts in Campbell California
Estate planning is not a one-size-fits-all endeavor. As a layperson, you may not know the best way to proceed given the unique dynamic of your family.
You don’t want to name someone who has a disability who is receiving government benefits in your last will. In California, special needs trusts are typically utilized under these circumstances.
The beneficiary would not be able to spend the money out of hand. However, with special needs trusts you name a trustee. This trustee would be able to use assets that have been conveyed into the trust for certain supplemental purposes. The nature of these expenditures would not impact existing Medicaid and SSI eligibility.
Special Needs Planning Consultation
Everyone in your family should be recognized as a unique individual when you are planning your estate. Different courses of action may be necessary depending on the circumstances and proclivities of each individual inheritance recipient.
If you would like to discuss your situation with a licensed estate planning attorney, contact our firm to set up a free special needs planning consultation.
- Act in Advance to Prevent a Conservatorship - April 27, 2021
- Beneficiary Designations and the SECURE Act: Prior Designations - April 20, 2021
- Beneficiary Designations and the SECURE Act: Eligible Designated Beneficiaries - April 16, 2021