Why Establish a Special Needs Trust?

If you have a loved one with special needs, you may worry about whether they will ever obtain gainful employment or otherwise be able to support themselves. You may feel particularly concerned if they are dependent on you, and wonder how they will support themselves if you pass away. Although there are government programs to assist individuals with special needs, they do not pay for everything. Additionally, leaving someone with special needs an inheritance can actually interfere with any government benefits they receive. Below, our Utah estate planning lawyer explains in greater detail.

Challenges of Leaving an Inheritance to a Loved One with Special Needs

There are many reasons you want to leave an inheritance for your loved ones. If you have a loved one with special needs, you know the incurred medical expenses and other costs associated with their disability. Even if they are eligible for government benefits to help cover these costs, they do not cover everything. Medicaid, for example, does not always cover all adult dental services.

It is natural to want to ensure that individuals with special needs, in particular, are properly cared for if you pass away. However, leaving an inheritance to cover these costs can interfere with certain benefits. For example, Medicaid is a means-tested program. This means that your loved one’s eligibility is based on both their income and assets. If you leave them even a seemingly small amount, it can increase the assets considered by Medicaid and disqualify your loved one from receiving benefits.

How Do Special Needs Trusts Work?

You can establish a special needs trust to leave an inheritance to your loved one indirectly. Instead of leaving them certain assets outright, such as a bank account or funds, you leave property ‘in trust’ with a trustee of your choosing. The property within the trust can be used to care for your loved one, but not by providing the clothing, food, shelter, and medical care provided for by a government program. The trustee will then cover these costs using the property within the trust.

Trusts are separate legal entities from the person who created it, and from the beneficiaries of the trust. Due to this fact, and the fact that the property is managed and controlled by the trustee and not the individual with special needs, it does not interfere with any government benefits received.

In addition to ensuring that loved ones are cared for, a special needs trust can also ease the burden on siblings and other family members. With assistance in place, other family members do not have to worry about covering the cost of care or other burdens.

Our Estate Planning Lawyer in Utah Can Help You Establish a Trust 

Trusts provide a great deal of protection while also allowing you to ensure that all of your loved ones are cared for after you are gone. At AGS Law, our Utah estate planning lawyer can ensure your trust is properly executed so it provides the protection you intended for years to come. Call us today at 801-477-6144 or fill out our online form to request a consultation and to get the sound advice you need.

Source:

le.utah.gov/xcode/Title75/Chapter7/C75-7-P6_1800010118000101.pdf