If you have a family member with special needs, you may find that the child, sibling, parent, spouse, or loved one in question may be entitled to valuable government benefits, such as Social Security or Medicaid, either now or in the future. However, most of these benefits are available only to those of very limited means.

As a result, you may find yourself at a crossroads. You could leave a substantial inheritance to this person, but he or she will be disqualified from receiving government benefits that could be crucial to the care they need. On the other hand, you may not want to have to disinherit him or her in order to preserve these benefits.

Fortunately, a Special Needs Trust will keep you from having to make this wrenching decision.

The specific purpose of a special needs trust is to supplement government benefits. This means that a special needs trust must only provide benefits above and beyond what the beneficiary or disabled person receives from any government or private agency.  Due to the intricacies of qualifying for these benefits, it is critical that the trustee of the trust has expertise in the proper administration of special needs trusts.

The trust should not duplicate any government-provided services. Nor should the beneficiary have any resemblance of ownership of the trust assets. Otherwise, the government could attempt to seize the trust assets for repayment of services rendered or decide that the beneficiary doesn't qualify for future benefits.

To accomplish this, you should give the trustee complete control over the distribution of assets and any income they generate. The beneficiary cannot be able to demand any principal or interest from the trust.

Please give very careful consideration to your choice for trustee. Of course, you or your family will continue to provide for this person while you are alive and able to do so. However, someone else should be prepared to assume this responsibility following your death or incapacity.

Contact us today to learn more about special needs planning, (919) 443-3035.
Jackie Bedard
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Attorney, Author, and Founder of Carolina Family Estate Planning