How a Special Needs Trust Can Benefit You and Your Family

special needs, DuPage County estate planning attorneysIt can be terribly challenging to plan for a time when you are not around to care for your loved ones. However, facing this reality by making an estate plan is one of the most selfless actions you can take. This is an especially true if you have a child, sibling, or other close loved one who has a serious disability. If you have been responsible for caring for a loved one who cannot care for himself or herself, you may want to find a way of providing for him or her after you pass away. One way to do just this is through an estate planning tool called a special needs trust.

Planning for the Care of a Loved One with Special Needs

A special needs trust or supplemental needs trust is an estate planning instrument that can be critically important to individuals who have a disabled loved one in their care. This instrument works by allowing the caregiver to place funds in the trust, which can then be used for the future care of their disabled loved one. A special needs trust allows you to put aside money for your loved one without affecting the disabled person’s eligibility for government assistance programs. Special needs trusts can be funded through gifts and inheritances or a lump-sum settlement. Without a special needs trust, money left to your loved one could potential disqualify him or her for certain government aid programs.

Leaving Money to a Loved One Could Increase His or Her Available Assets Too Much

The majority of government-funded aid is distributed to individuals under a certain income level. For example, Medicaid, Supplemental Security Income, and housing subsidies all have income criteria that a person must meet in order to qualify for the financial assistance. If you leave money to your disabled loved one without the appropriate estate planning instrument, it could be counted toward his or her available assets. If the funds are substantial, this money could bump your loved one’s income up to a level which makes him or her ineligible for programs with income or asset limits.

A properly-drafted special needs trust helps you ensure that your disabled loved one will receive the funds he or she needs in a way that does not jeopardize participation in other government assistance programs. Ideally, a special needs trust will help your disabled family member enjoy a high quality of life even after you have passed away.

Contact a Wheaton, Illinois Estate Planning Attorney for Help

Drafting a special needs trust or other estate planning instrument can be quite complex. For quality legal assistance from a knowledgeable DuPage County estate planning lawyer, contact Stock, Carlson, Oldfield and McGrath LLC. Schedule a consultation by calling 630-665-2500 today.

 

Sources:

http://www.americanbar.org/content/dam/aba/publishing/rpte_ereport/te_lewis.authcheckdam.pdf

http://www.americanbar.org/newsletter/publications/law_trends_news_practice_area_e_newsletter_home/0501_estate_financialplanning.html

Establishing Trust Funds for Special Needs Children in Illinois

special needs children, Illinois Special Needs Trust AttorneySpecial needs children often require expensive care and treatment, and parents may worry about who will care for their children in the event of an untimely death. Parents may even seek counsel from estate planning attorneys to determine their options and gain information regarding trusts for their children with special needs.

Special Needs Trusts — The Basics

Special needs trusts are established so that parents with special needs children can put money aside to be used for a child's care at a later date. Any funds in the trust are protected and will not impact the amount of money a disabled child or person receives from other sources such social security. Even though there may be thousands of dollars in a trust fund, the individual will still retain all rights to Medicaid for health insurance benefits.

Special Needs Trusts — Financial Security

If a trust fund is not set up in the name of a special needs individual, any monies that person receives can impact social security and Medicaid eligibility. In Illinois, a disabled person cannot have an income more than three times over the poverty level, or receive more than $2,000, and still receive supplemental security income or government health benefits. Once access to these resources has been cut off, an individual would have to re-apply to all programs and prove that he or she has no additional financial resources, therefore causing potential financial hardship. This problem can be eliminated by having a special needs trust fund set up in the individual's name.

Special Needs Trusts — Provisions

Individuals who are guardians of a child or children with special needs should consider making provisions for a supplemental needs trust in their wills. This will entitle a special needs individual to adequate financial provision upon the death of his or her caretaker. There are also options for setting up and paying into a special needs trust while a guardian is still living. If done properly, this will not affect a disabled individual's eligibility for government assistance.

A third option is to set up a special needs trust to hold significant amounts of money granted to the special needs child—inheritance paid out from the death of another relative, for example. This money can go into a trust that has been certified by a public court to ensure the special needs individual will still qualify for his or her other benefits.

For more information about how to establish a special needs trust for your child, please contact a DuPage County special needs trust attorney today to schedule a consultation. We are proud to be of service to Illinois families and we look forward to working with you.

A Brief Guide to Special Needs Trusts

disabled people, special needs beneficiary, special needs trusts, supplemental care trusts, Wheaton special needs trust lawyerAnyone with special needs or disabled relatives wants to do everything they can to ensure the most comfortable and opportunistic future. Setting up a trust is one way to accomplish this. A trust is an agreement in which a third party, known as the trustee, holds assets for the beneficiary.

Setting up a trust for beneficiaries with disabilities can be challenging. While it is true that creating a special needs trust can be more involved than setting up a traditional one, these trusts can help provide for the needs of loved ones. The first step in deciding if a setting up a trust is a smart option is to understand how special needs trusts operate.

The laws that relate to special needs trusts are complex and often confusing. As the World Institute on Disability reports, disabled people cannot legally have a trust for themselves. However, this does not mean they will be excluded from an inheritance.

Instead of being a direct beneficiary, a disabled family member will receive what is commonly known as a "supplemental care trust." This system works to ensure that inheritance money does not directly interfere with any government benefits, namely Supplemental Security Income and Medicaid.

Supplemental care trusts require the appointment of a trustee to manage the money for the intended beneficiary. Not only does this avoid any chance of wrongfully disqualifying one for SSI and Medicaid, but it also helps ensure responsible management of the beneficiary’s money.

It is important to understand, however, that there are times when a special needs beneficiary may no longer qualify for government assistance. A variety of factors, including the type of disability, the amount of government assistance they are currently receiving, and how much they are likely to inherit will factor into this decision.

If you are interested in setting up a supplemental care trust, a Wheaton special needs trust lawyer may be able to help. At the Illinois law office of Stock, Carlson, Flynn & McGrath, LLC., our clients' needs are our top priority. Contact us today at 630-665-2500 to schedule a consultation.