If you have a loved one with extensive medical needs, then your might be worried about their future after your gone. As we’ve discussed previously on the blog, a special needs trust might be a great estate planning tool for you to help provide for your loved one.
Basically, these trusts allow you to provide for your loved one without affecting their ability to qualify for certain government programs, such as Supplemental Security Income and Medicaid. But there are some limitations on what trust assets can be spent on. You should be aware of those limitations as you engage in estate planning so that you can better determine if creating a special needs trust is truly right for you, your estate, and your loved one.
What can a special needs trust pay for?
A lot, actually. A lot of people think that special needs trust assets can only be used for medical expenses and transportation to medical appointments, which certainly can be covered, but there’s a lot more that can be paid for with these trust assets. For example, a primary residence won’t count toward your loved one’s countable assets when it comes to qualifying for government programs, and the same holds true for a vehicle. Even home furnishing, personal effects, and items that are necessary for self-support can be paid for by assets in a special needs trust without affecting other benefits.
How can a special needs trust affect benefits eligibility?
There are some ways that special needs trust assets can affect eligibility for government programs. Distribution of case, retirement accounts, investments, and income properties will all be counted as income and assets for government benefits eligibility purposes, so those options probably aren’t in your loved one’s best interests if you want them to maintain government benefits.
Know the ins and outs of estate planning
The best way to ensure that your loved ones are cared for as best as possible, and that your assets are as fully protected as possible, is to know every aspect of estate planning and how to use them to your advantage. Attorneys who are adept in this area of the law stand ready to assist you as needed so that you can bring your vision of the future into reality.
