Forming a Special Needs Trust
If you intend to leave money or property to a loved one with a disability, you must carefully craft a plan that can be executed to your exact wishes. Otherwise, your child's Supplemental Security Income (SSI) and Medicaid benefits could be threatened and may become ineligible. By setting up a special needs trust as part of your estate plan, you can avoid these problems and ensure your child is properly taken care of.
Owning a house, a car, furnishings, and normal personal effects will almost certainly affect eligibility for SSI or Medicaid, as well as other assets, including cash in the bank. For instance, if you leave your special needs child $15,000 in cash, that gift could disqualify your loved one from receiving SSI or Medicaid. A well-intentioned gift can pull the rug out from under your loved one by disqualifying them from the government assistance they rely on.
At Clavel Law, my mission is to help you navigate around many of these issues by creating what's called a Special Needs or Supplemental Needs Trust. By doing so, you can transfer any cash or assets into a Special Needs Trust instead of leaving property directly to your loved one.
Appointing a Trustee
A crucial part of the process involves selecting someone to serve as a trustee, who will have complete discretion over the use of trust property. This person will be in charge of using the money or distributing assets on your loved one's behalf. Because your child will have no control or ownership over the money or assets, SSI or Medicaid administrators will not take into account the "trust property" for the purposes of program eligibility. The trust will terminate when it is no longer needed — commonly, at the beneficiary's death or when the trust funds have been exhausted.
If you or someone you know is looking to set up a will or trust, reach out to my office today to set up a simple consultation. We can discuss your situation and all of the options you have available. Call today.