NASHVILLE, TN. If you plan to leave your special needs loved one an inheritance in your will, you may want to consider a special needs trust. Without proper consideration, your loved one could lose access to crucial government benefits upon inheriting money or property from you. Special needs individuals who inherit money or assets from a relative, can potentially lose access to Medicaid and SSI income. According to CNBC, disabled individuals must have less than $2000 in cash and assets in order to qualify for Medicaid and SSI. Any additional money a person comes upon could either be taken by the government to cover the person’s care or the person could lose access to government benefits.
In order to avoid this potentially devastating outcome, families often set up special needs trusts.
A special needs trust is money set aside by a family to support a special needs family member and to supplement Medicaid and SSI income. According to the New York Times, there are two main types of trusts available to special needs individuals. One is called the OBRA trust. This trust must use money that the special needs individual already has—such as inheritance or a personal injury settlement. This trust is owned directly by the individual and if the individual passes away, money from the trust may go to the government. A third-party trust is designed to supplement a person’s SSI income and Medicaid benefits. As Medicaid continues to get slashed and as federal and state governments cut benefits, a third-party trust can ensure your loved one is cared for if the government cannot help. Additionally, the government may not always cover dental procedures, vision, and other supplemental needs. A special needs trust can ensure that a family member is cared for. Third-party trusts can also name beneficiaries who will receive the money if your special needs family member passes away.
The most complicated aspect of a trust is the fact that the beneficiary cannot receive the money directly. Someone must manage or administer the trust. Sometimes this person is another trusted family member and sometimes a professional is hired to manage the trust. In both cases, the manager can be paid a reasonable fee for performing this service.
It is important to set up the trust carefully, because an improperly worded trust can result in the possibility that the government could seize the person’s assets. How much should be put in a trust? Given the cost of managing a trust, CNBC recommends that at least $100,000 be set aside. If this is not possible, you may want to speak to a special needs trust lawyer like Elder Law of Nashville, P.L.C. Our firm can review your circumstances and help you understand your options for caring for your special needs loved one. The time to plan for your special needs loved one is now. The future can be tough to predict, and a special needs trust can offer much-needed stability.
Visit our firm at https://elderlawofnashville.com/ to learn more about your options.
 

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