There are many different types of trusts, including living trusts, testamentary trusts, revocable and irrevocable trusts, and special needs trusts. It can be difficult to know what type of trust is right for you and your loved ones. In particular, a special needs trust is one that can cause a great deal of confusion and misunderstandings for those unfamiliar with special needs estate planning. Just what is a special needs trust? Do you need to have one? How do they work in Michigan?
Loved Ones With Disabilities
Parents and grandparents of those with special needs face difficult challenges in life. But they also receive unique rewards that others can’t understand. Parenting a special needs child is not easy! For example, many parents lay awake at night worried how their special loved one will be financially protected if something should happen to them. Who will pay for their care? What will happen to their benefits?
If you have a loved one with a disability, especially a child, you’ll want to be clear about your intentions to leave money or property to this individual through your estate plan, using a well-drafted special needs trust. Failing to do this could jeopardize your loved one’s access to benefits, including Medicaid or Supplemental Security Income.
Making Sure You Don’t Jeopardize Their Access to Government Assistance
Leaving assets to your loved one with a disability might seem like a good gesture, but leaving them with cash may hurt their ability to receive SSI or Medicaid benefits. This is where an alternative such as a special needs trust can be extremely beneficial. Instead of leaving that property or assets directly to the beneficiary, you leave it to the trust.
When the trust is no longer needed (such as when the beneficiary passes away or when the trust assets have been depleted), the trust simply ends. The reason that this doesn’t interfere with your loved one’s ability to receive government benefits is because he or she is not retaining control over the assets – but this only works if the special needs trust is drafted the right way.
How to Set Up a Special Needs Trust
You can set up a special needs trust in a way that makes the most sense for your loved ones. Common expenses included in a special needs trust are home furnishings, out of pocket dental or medical expenses, vehicles, education, personal care attendants, vacations, or necessary physical rehabilitation.
In this way, you can help to alleviate some of your concerns about a special needs loved one being able to afford the care that he or she needs and provide them some comfort. Without interfering with his or her qualification for SSI or Medicaid benefits, you can rest assured that your loved one will be well taken care of.
Working With an Attorney For a Special Needs Trust
As with many estate planning documents, it’s critical that the trust be set up and administered properly. You would be devastated to learn that the trust wasn’t providing what you intended for your loved one. In fact, with special needs trusts, it is even more important to work with an attorney with experience in this type of estate planning. Why? A wrongfully-worded special needs trust may cause your loved one to lose their governmental benefits entirely. It’s vital to get appropriate legal counsel – experienced in drafting special needs trusts — early on to structure the trust the right way.
Through a properly-drafted special needs trust, you can give your loved one the support or amenities that he or she might need without being concerned about eliminating qualifications for government benefits. An experienced Oakland county special needs trust attorney can assist you in setting up this type of trust in order to best provide for your loved one.
Contact the Oakland County, Michigan law firm Barron, Rosenberg, Mayoras & Mayoras, P.C. You can call us today at (248) 213-9514, or through our Contact page, to learn about how you can plan for the future and provide this valuable assistance to your loved one. You too can start sleeping well at night!