Are you in the process of creating an estate plan and think that you need to do things differently because of your disabled child? If so, it will help to know the following things about giving them an inheritance so that your child doesn't become disqualified from receiving government support.
Why Is A Will A Mistake?
When you use a will to pass on an inheritance to a special needs child, they will end up inheriting everything all at once. What ends up happening is that the government sees this as a type of income, and it can end up causing them to no longer receive government benefits. They will then need to spend their inheritance until there is nothing left in order to be able to qualify for benefits once again. Thankfully, you can avoid this with a special needs trust.
Can You Give The Inheritance To Another Family Member?
Some people think that the solution is to simply give the inheritance to another family member, such as the person that will be taking care of your special needs child. While this makes things relatively simple, the unfortunate nature of this plan is that your wishes cannot be enforced. Once you pass along your assets to another person, those assets belong to them. They can use the inheritance as they wish, or potentially lose the inheritance as part of a divorce.
Why Is A Special Needs Trust The Right Option?
The nice thing about a special needs trust is that it will take your assets after you pass away and put them into a trust fund for your child. The assets are not all immediately passed on to them, but are instead provided when you specify them to be distributed as supplemental benefits. Government benefits will still be available for their essential needs, but your special needs trust will pay for all those additional things that are not covered. For example, things like clothing, entertainment, vacations, and hobbies.
What Assets Go Into A Special Needs Trust?
While the main thing that will go into the trust is your assets after you pass away, you can also put life insurance policies into the trust. This gives your special needs child access to extra money that is designed to pay for their supplemental needs. You can also allow other people to contribute to a special needs trust so that it can be distributed according to the rules of the trust.
Work with an estate planning lawyer near you who can help create a special needs trust for you.Share