Keeping You On Track As To Your Legal Matters

3 ways that a special needs trust simplifies estate planning

On Behalf of | Jan 26, 2024 | Estate Planning |

Estate planning often seems complicated, especially when a loved one has special needs. A special needs trust is a useful tool that can make the process smoother.

There are 3 key ways a special needs trust simplifies estate planning.

1. Preserves benefits

One major benefit of a special needs trust is that it allows your loved one to maintain eligibility for needs-based government programs such as Medicaid and SSI. Nearly 30% of American adults with disabilities depend on SSI or SSDI, and almost 50% of them rely on Medicaid or Medicare coverage. Assets placed in the trust are not counted against them when determining their eligibility for these programs.

2. Shifts financial management responsibility

If you worry about your loved ones making financial decisions for a family member with special needs, you can use a special needs trust to appoint a trustee who can manage those funds appropriately. This gives you peace of mind about your loved one’s long-term stability and responsible spending.

3. Includes personalized decisions

A special needs trust lets you set guidelines for spending from the trust for your loved one’s benefit. You can provide instructions on which expenses the trust should cover, such as medical bills, housing, education, recreation or other defined needs. You can also prohibit distributions that would negatively impact their benefits. The flexibility of a special needs trust allows you to make planning decisions tailored to your loved one’s unique requirements.

With proper preparation using a special needs trust, you can provide for your loved one’s needs even when you cannot be there anymore.