It is no secret that loved ones with special needs require a particular amount of care, and are likely to have a larger amount of medical expenses than the average person. Even if you have a considerable amount of financial resources to give them when you pass away, the question will remain whether those resources will be able to sustain them throughout the remainder of their life. Special needs trusts may be the best way to supplement their inheritance without tampering with their government benefits.
Maximizing Funds For Their Lifetime
One mistake that many people tend to make that can create long-term problems for their loved ones is leaving a large sum of money to their loved one(s) with special needs. The reason for this is because the simple act of giving them a large amount of financial resources excludes them from support gained by income-restricted programs.
The U.S. government offers Supplemental Security Income (SSI) for low-income individuals with special needs. The aid is determined by a means test and the beneficiary must have less than $2,000 in assets in their name in order to successfully apply. If that amount is exceeded by inheritance, it will be put into a separate trust in order to reimburse the government.
This is why a special needs trust is extremely useful, because it can hold up to $100,000 without affecting your loved one’s SSI aid, and substantially lower the risk of running out of resources during the course of their life.
They Are Irrevocable
There are pros and cons to special needs trusts being irrevocable. The downside is that it may be difficult to amend them later down the line when you believe the terms of the trust should change with your loved one’s changing situation.
The benefit, however, is you can be assured that the funds within the trust will be used for their intended purpose. Because this type of trust is irrevocable, the assets placed inside of them are unable to be seized by creditors or the winner of a lawsuit were there to be one.
Contact our Edmond Estate Planning Team Today
We understand that making sure your loved one with special needs are taken care of after you are gone is your top priority. We are here to offer our experienced and personalized services to help you make the best possible plan for your loved one.
If you would like more information about how we can help you set up a special needs trust, don’t hesitate to contact us today through our website, or give us a call at (405) 267-9921!