When you love someone with all your heart, you want nothing more than to provide for them and ensure their happiness. However, if your loved one has special needs, this can often require special planning. If you have a spouse, child, grandchild, or other intended beneficiary with a physical, mental, or developmental disability, then you need to take steps to ensure they do not lose their benefits after you're gone. It is not uncommon for people to lose their SSI, Medicaid, or other benefits when inheriting life insurance, real estate, or any number of other assets. However, it doesn’t have to be this way.
There are a number of options available that can help you maintain your loved one’s benefits while still providing for their future. By working with an experienced attorney at Tallgrass Estate Planning, you can develop a plan that will allow your loved one to continue receiving the benefits they need and deserve. With careful planning, you can ensure that your loved one will be taken care of long after you're gone.
Planning for the future means preparing for the unexpected. A stand-by special needs trust is a proactive measure embedded within your estate plan. It's designed to activate only when needed, ensuring that if your loved one with special needs inherits assets, their eligibility for essential benefits like SSI or Medicaid remains unaffected. This trust stands ready, offering peace of mind that your intentions will be honored without jeopardizing crucial support.
When you wish to provide for a loved one with special needs without compromising their access to government benefits, a third-party special needs trust is an effective solution. Funded by someone other than the beneficiary—typically a parent or grandparent—this trust allows you to allocate resources for their care and enrichment. By keeping these assets separate, you ensure that your loved one continues to receive the support they need while benefiting from your generosity.
Sometimes, individuals with special needs come into assets through inheritance, legal settlements, or other means. A first-party special needs trust is established using the beneficiary's own assets, safeguarding their eligibility for programs like Medicaid and SSI. This trust ensures that the funds are used to enhance their quality of life without disrupting the benefits they rely on.
The Achieving a Better Life Experience (ABLE) Act introduced a new avenue for financial planning. ABLE accounts allow individuals with disabilities to save money for disability-related expenses without affecting their eligibility for government benefits. These tax-advantaged accounts can be used for education, housing, transportation, and more, offering flexibility and autonomy in managing personal finances.
