22 Apr
Everyone in the Dallas/Forth Worth area has unique lives and when they go through the estate planning process, they need to develop their estate plan based on the unique aspects of their lives. Some may need simple wills, advanced healthcare directives and a power of attorney. Others may need complex trusts to help manage their assets and minimize tax consequences. Some will also need a special needs trust.
Special needs trusts could be important for people who have children with mental or physical disabilities. The disabilities may prevent their children from ever being able to earn a significant income. These children may be eligible for various benefits, which may be necessary for them when they become adults. Some of the common ones are Supplemental Security Income, Social Security Disability Benefits, Medicaid and Medicare. Most of these programs have income and asset limits in order to be eligible for them though.
Special needs trusts allow children to keep disability benefits
This may not be a problem while the parents are alive, but if they give them a large inheritance when they pass away, it could cause the child to become ineligible for the benefits they need. Special needs trusts allow parents to pass the inheritance they want to give to the child without affecting their eligibility.
The inheritance would go into the trust and not to the child directly. The trustee of the trust can then make sure the child is taken care of through the assets in the trust, but would be able to control the amount they receive each month, allowing the children to remain eligible for their benefits.
There are many people in Texas with children with special needs. Parents may be responsible for providing for them knowing the children will not be able to do so even as an adult. As people go through the estate planning process, they may need to establish a special needs trust to ensure the children are still provided for after they pass away as well. These trusts need to be drafted correctly to be effective though and experienced attorneys know how to ensure they are valid.