It’s natural that if you care for a relative with special needs, you’ll want to ensure their future after you’ve passed on. However, without proper steps, that act of love might seriously hamper their ability to get the government benefits they need.
The Social Security Administration, in the form of Supplemental Security Income (SSI), is the primary source of the necessary benefits for disabled people. People reliant on those benefits must maintain a certain level of assets to retain eligibility. Yet, if you were to add a special needs trust to your estate plan, you can provide for your loved one without hampering their eligibility for these needed benefits.
A quick overview of special needs trusts
Like all trusts, a special needs trust is a document that creates a legal entity that owns assets for another’s benefit. The trust is controlled by a trustee, a designated person or entity, which distributes payments as they believe necessary. A properly drafted special needs trust will afford a person on government benefits special luxuries and added financial security.
When to set up a special needs trust?
As a special needs trust is an estate planning tool, then you would consider drafting a special needs trust in the same moments you would consider reevaluating your estate plan. If you have:
- Had a child
- Gotten married
- Gone through a divorce
- Received an inheritance
It’s time to review your estate plan. And if you care for and wish to support one of your family members with special needs, then that’s the moment to build the trust.
Estate planning is an act of care
The ultimate piece to remember is that you’re building your estate plan to care for your family. When someone in your family needs special assistance or special consideration, then that’s simply what you must do.