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Estate Planning Options: Special Needs Trust

One of the leading benefits about estate planning is that you have the flexibility to plan for a number of different possibilities or circumstances. A variable that needs to be taken into consideration is putting together the right estate plan if one of your beneficiaries is deemed disabled. Leaving an inheritance to that loved one without putting certain measures in place could put them in a position to lose the government benefits that they may have otherwise been entitled to. By establishing a Special Needs Trust, you can ensure that this beneficiary will still receive an inheritance without jeopardizing their government benefits.

What is a Special Needs Trust?

When a person is deemed to be disabled, they will be entitled to certain forms of public assistance such as Supplemental Security Income, Social Security, Medicaid or Medicare. As with every public assistance program, the applicant needs to show that they are not only medically entitled to this type of program but financially entitled to it as well. If an applicant has access to a certain amount of money which will support their cost of care and general livelihood, they will not be eligible for any of these government programs.

Although there are great benefits associated with public assistance programs, there are many expenses that are not covered which puts the person or their loved ones in a position of needing to cover these costs. If you would like to financially help a disabled loved one in covering these costs without putting their government benefits at risk, the best way to do it is to set up a Special Needs Trust for their benefit.

A Special Needs Trust can protect their eligibility for these different programs while still setting aside money for certain expenses. Money that is placed in a Special Needs Trust is not counted toward financial eligibility for these different government programs as long as the money placed in trust is not used for food or shelter expenses. Although the laws associated with a Special Needs Trust can vary from state to state, on average proceeds from a Special Needs Trust can be used for medical expenses, caretaker payments, transportation expenses and other expenses which will be highlighted in the document.

Important Details About a Special Needs Trust You Should Know

Before you incorporate a Special Needs Trust into your estate plan, it’s key that you know certain details about this powerful document. First and foremost, it’s important to understand that a Special Needs Trust is irrevocable. This means that once the grantor, or the person funding the trust, places money into the trust account, that money can only be used according to the terms of the trust. Therefore, it’s critical to pick a trusted individual to serve as trustee of this document.

Another added benefit of a Special Needs trust is that the assets of the trust cannot be seized by creditors. The money in trust is completely protected and specifically earmarked for the disabled loved one which can give the grantor that added peace of mind of knowing that their loved one will be cared for financially.

Learn More About Setting Up a Special Need Trust

Due to the intricacies associated with a Special Needs Trust, it’s always advisable that you connect with an experienced estate and trust planning attorney who will guide you through the process. When you work with our team, you can rest assured that we will provide you with the guidance that you need to safeguard the government benefits of your loved one while still financially providing for their needs. Contact Gregorek and Associates, PLLC at 425-284-3450 or use the contact form on this page today to learn more about what steps you can take to establish a Special Needs Trust.

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