Estate Planning with a Special Needs Child

Comprehensive financial and estate planning is crucial for all families.  But, when a family includes a loved one with special needs, comprehensive planning is of utmost importance.

For example, families with special needs individuals must pay careful attention to the income and assets of the special needs individual and the method in which gifts or inheritances are received.  These financial matters can affect a disabled person’s eligibility for important government benefits – Supplemental Security Income (SSI) and most importantly, Medicaid.

Disabled individuals must meet asset and income limit tests in order to receive these benefits.  The resource test places a $2000 limit on a single person’s assets.  The income limit is more complicated and can count earned income such as wages, or money received from other sources like free food and shelter, gifts, and inheritances. The income limit is tied to the Federal Benefit Rate, which is currently $735 per month for an individual.  (Some types of income do not count towards this limit)

Thus, in order to provide their disabled loved ones with a better quality of life, families must take special care in leaving inheritances to them.

Special Needs Trusts, also known as Supplemental Needs Trusts, are used to shelter assets of a disabled person to allow them to qualify or keep their government entitlements such as SSI and Medicaid.  Importantly, these trusts are designed to supplement government benefits and not to replace or supplant them.  Therefore, the proper drafting of these trusts is of utmost importance to keep these benefits in place.

Special Needs Trusts are the legal centerpiece of a plan for a disabled person.  Elder Law attorneys are professionals equipped with to training to assist families with special needs individuals.


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