When life throws us a curve ball, it is reassuring to know that are ways that we can plan ahead to deal with the pitch from life. I was once told that there would be accidents in life, some small and some large, but none that would alter the course of my life. But for others, life throws a curve ball that alters the course of their life. We know a young man, who was seriously injured in an accident with an all-terrain vehicle. He is now dealing with the consequences of that accident for the rest of his life. I have an aunt who was born with cerebral palsy. While she was able to take care of herself for most of her life, but she did require special equipment and modifications later in her life. While both individuals were thrown curve balls, they managed to continue living life afterwards.
But for others the medical expenses accumulate or the special care that is needed can quickly deplete assets. Often times, fundraisers or Go Fund Me campaigns are done to help the family raise the funds that they will need. For these families, they are unaware of the benefits of creating a special needs trust to manage and disburse the funds that been raised. Before speaking with an attorney on creating a special needs trust for your loved one, consider these common reasons for creating one.
First, assets can be earmarked for the care of the individual with a physical or mental disability. If the individual is a minor, there is no need to seek a conservatorship at the local courthouse as the trustee can collect, manage and disburse assets for the beneficiary of the trust. The trust can provide for a variety of needs and specify how the funds are to be used to benefit the individual.
In addition, a trustee can be selected who will oversee the investment management and disbursement of the trust funds. The trustee is held accountable for disbursing the funds according to the intentions that created the trust.
Third, the trust can minimize disruptions to the individual’s governmental assistance that is received. Naming a family member with a disability in your will can increase the value of their available assets to use and eliminate the financial requirement to be eligible for certain programs such as SSDI and Medicaid, which are needs-based programs. The beneficiary is protected by directing the intended inheritances into a special needs trust to be used to benefit the disabled individual.
Finally, preserve the family’s wealth and resources for the life of the beneficiary. While some states may require that state assistance be repaid after the death of the beneficiary, the trust provides a method to provide just enough during the beneficiary’s lifetime. For divorcing couples with a disabled child, the trust can ensure that payments are received throughout the child’s lifetime from both parents. The parents can designate a third party to be the trustee, who will manage the assets and disburse them for the benefit of the disabled child. The trust can remove the payment from considering whether the child qualifies for certain government assistance programs.
If you are thinking about whether you need a special needs trust or how to implement a special needs trust for the benefit of your loved one, call our Client Coordinator today to schedule your one-hour pre-engagement meeting.