There is no universal estate plan that is right for every family. One type of specific estate planning situation that exists for some people is the need to provide for someone with a disability. This is often done through the creation of a supplemental or special needs trust.
Why would you need to use a special needs trust to provide for someone with a disability? The answer would be that you should use such a trust to preserve eligibility for government benefits.
There are some types of medical expenses that are simply out of reach for virtually everyone. These can be incurred by people with special needs. For example, consider someone who is born with autism. This is a relatively common challenge, and the cost of care is extraordinary. According to the Autism Society, a lifetime of care for someone with autism could generate expenses that exceed $3 million in total.
Few people can simply write checks to pick up these expenses. As a result, the Medicaid program is often the solution.
To become eligible for Medicaid you have to demonstrate a significant amount of financial need. Generally speaking, if you have countable assets that exceed $2000 in value you cannot qualify for the program.
If you were to use a last will to direct the distribution of your assets after you pass away and name someone who is receiving these benefits in the will this inheritance could be a disaster. The person receiving the inheritance would suddenly have assets that are in excess of the $2000 upper resource limit. Benefit eligibility could be jeopardized.
Special needs trusts are constructed to allow the trustee to make funds available that improve the quality of life of the beneficiary. Under Medicaid rules there are certain types of expenditures that would be allowed without impacting eligibility.
If you would like a more comprehensive explanation of special needs trusts we have a resource that we would like to offer to you at this time. Our firm has put together a series of highly informative special reports. These reports probe numerous different aspects of estate planning and elder law in great detail.
We have a report on special needs planning. If you are interested in learning more about providing assets for someone with a disability we urge you to download this report and read it at your earliest convenience.
You can access the report by clicking this link: New York Special Needs Planning Report.
After you read the report you may want to take action for the benefit of someone that you love. Our firm is fully capable of assisting if you are interested in special needs planning, and we would be more than glad to provide you with a free, no obligation consultation.
- What You Need to Know about Medicaid’s “Look-Back” Rule - February 1, 2023
- What You Need to Know about Elder Financial Exploitation - January 25, 2023
- What Is an Asset Protection Trust? - January 18, 2023
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