If you want to leave money or property to a loved one with a disability there are some special things to consider. A bequest or gift could jeopardize your loved one’s ability to receive Supplemental Security Income (SSI) and Medicaid benefits. By setting up a “special needs trust” in your will, you can avoid some of these problems.
Rather than leaving property directly to your loved one, you leave it to the special needs trust.
The purpose of any special needs trust is to maximize resources for an individual with disabilities. Many individuals with disabilities rely on means-tested (or needs-based) public benefits that have income and/or asset limits. A special needs trust is designed to receive and administer assets for the benefit of the individual with a disability. If the trust is drafted, established, and administered correctly, the transfer of assets into the trust and the existence of the trust assets will not disqualify the trust beneficiary from means-tested public benefits. The beneficiary continues to receive the public benefit and, at the discretion of the trustee, has access to the trust assets that improve the quality of the beneficiary’s life.
In some circumstance ABLE accounts can be used instead or in addition to a special needs trust. ABLE accounts allow disabled individuals to place a limited amount funds in a special account. Funds in an ABLE accounts do not disqualify the individual for means-tested government benefits. The state of Kentucky these accounts are called STABLE accounts.
While special needs planning requires special attention and care, it is not just for the wealthy. We can help with affordable planning for your special needs loved one.