When you are creating an inheritance list you should consider the life situation of everyone on the list. There are various different ways to arrange for others to inherit assets after you die. The best way to proceed will vary on a case-by-case basis.
If you make assumptions, you can make mistakes that ultimately yield negative consequences.
People often assume that legal advice is too expensive. This is a misconception, because there is such a thing as cost, and there is also such a thing as value. If you spend money wisely, you may get great value in return. With this in mind, let’s look at the cost of a special needs trust.
Special Needs Planning
People with disabilities often rely on government benefits like Medicaid and Supplemental Security Income. Medicaid is a government health insurance program for people with significant financial need. Some people with disabilities require medical care and treatment that can cost millions of dollars over a lifetime. In many cases Medicaid absorbs these costs.
If you were to leave a direct inheritance to someone who was enrolled in the Medicaid program, he or she may lose benefit eligibility. A special needs trust can provide a solution to this dilemma.
With a special needs trust you name a trustee and a beneficiary. The trustee can use funds that have been conveyed into the special needs trust for the supplemental needs of the beneficiary. Under this arrangement the existence of the trust does not jeopardize the beneficiary’s benefit eligibility.
The beneficiary does not receive direct monetary distributions. He or she does not have decision-making authority with regard to the way that the trust is administered. This is why the special needs trust does not impact eligibility for government benefits.
How much does it cost to create a special needs trust? The exact cost will vary depending on the circumstances. Suffice to say that the cost of the creation of the trust is going to be far less than the cost of a loss of much-needed benefits.
The Ideal Plan
If you want to provide for all of your loved ones in the optimal manner you should create an estate plan that ideally suits your needs. Each family is different, and every family is comprised of unique individuals with varying needs. There is no all-in-one estate planning tool that is perfect for all circumstances.
The wise course of action is to discuss everything in detail with a licensed estate planning attorney. Your lawyer will gain an understanding of your family dynamic, become apprised of your objectives, and make the appropriate recommendations.
You will ultimately emerge from the interaction with an estate plan is right for you and your family.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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