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Looking at the benefits of special needs trusts

| May 10, 2021 | Trusts

If someone in your family has special needs, you likely need to think about their well-being and the ways in which your estate plan will affect their future. For example, some people do not understand the potential consequences of receiving assets through certain types of estate plans as a disabled individual.

Fortunately, special needs trusts take various factors related to a disabled beneficiary into account and help avoid challenges down the road.

How do special needs trusts protect disabled beneficiaries?

There are various ways in which a special needs trust can help protect your disabled loved one’s future. According to the California Department of Health Care Services, special needs trusts help those with disabilities to retain their eligibility for public assistance, even though assets would disqualify them for benefits in other instances.

Disabled beneficiaries can keep their eligibility for different forms of public assistance, such as Medicare, Medicaid and Social Security benefits. Unfortunately, some people do not recognize these issues and their loved ones lose eligibility as a result of assets they receive through a family member’s estate plan.

How should you approach the process of creating a special needs trust?

If you are thinking about setting up a special needs trust, go over your financial circumstances and your disabled loved one’s needs closely. Make sure that the trust is valid and go over the terms of the trust carefully.

It is also helpful to discuss your plans with family members and talk about any potential concerns you have. For many families, these trusts provide peace of mind and protect the financial future of those with special needs.