There are various different ways to facilitate asset transfers to your heirs. When you are making decisions, you should evaluate the life situation of each person on your inheritance list. You can provide for each person optimally if you act in an informed manner.
Special Needs Trusts
Special needs trusts are primarily used to preserve government benefits. Many people with disabilities are enrolled in government benefit programs that are only available to individuals who can demonstrate significant financial need. These programs would typically include Medi-Cal, which is a government run health insurance program, and Supplemental Security Income.
Many people with special needs are unable to earn significant income, so they do in fact have limited financial resources.
If you were to name a person with a disability in your last will, this individual would receive a direct inheritance. All of a sudden, his or her financial profile would change significantly. This could impact government benefit eligibility.
Depending on the condition in question, Medi-Cal can pay for millions of dollars of care and treatment over the course of a lifetime. These benefits are invaluable to many people with special needs.
When you create a special needs trust, you do not jeopardize benefit eligibility. The person that you want to provide for would be the beneficiary, and you also name a trustee when you create the trust agreement.
Under Medi-Cal rules, the trustee could use assets that have been conveyed into the trust to provide for the supplemental needs of the beneficiary. Supplemental needs would be needs that are not being met by government benefits.
It should be noted that the beneficiary cannot handle the funds. The trustee must act to provide for the beneficiary.
Cost of Trust Creation
Now that we have explained the value of special needs trusts, we can look at the matter of cost. Any time you retain an estate planning attorney to create a legally binding device, there will be some legal expenses. However, when you consider the cost of a loss of benefits, the investment that you make is going to provide a great deal of value.
Depending on the number of heirs you have and your particular assets and estate planning goals, it may be appropriate for you to utilize a stand-alone Special Needs Trust for your special needs heir, or to make a special needs trust provision part of your revocable living trust estate plan. Other trust options may also be appropriate. Because circumstances vary, we cannot quote an exact figure in this blog post. However, if you would like to discuss special needs planning with a licensed and highly experienced attorney, feel free to contact us through this website. We offer free consultations, and we will set up an appointment that fits into your schedule.
Free Report on Special Needs Planning
Our firm has prepared a free special report on the subject of special needs planning. This particular report focuses on special needs planning as it applies to minor children.
If you would like to access your copy of this informative report, click this link and follow the simple instructions: Special Needs Planning Report.
We also regularly offer free workshops on Special Needs Trust. To see our current schedule and to register for an upcoming event, follow this link: Free Workshops
- 2024 Federal Estate and Gift Tax Update (VIDEO) - November 16, 2023
- National Long-Term Care Awareness Month (VIDEO) - November 13, 2023
- Proposition 19 and Repeal the Death Tax Act (VIDEO) - November 3, 2023