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Attorneys For Today, Counselors For Life

Attorneys For Today, Counselors For Life

Metz, Bailey & McLoughlin provides customized estate planning and business law services to clients throughout Ohio

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What are special needs trusts?

| Feb 5, 2021 | estate planning | 0 comments

As the parent of a child with special needs or a relative of a person with a disability, you need to understand the benefits of supplemental (special) needs trusts. Your estate plans may seem like they are comprehensive enough to provide for your adult child or family member after you die. However, without the right provisions and documents, they might not provide as much protection and financial security for your loved one as you think.

Special needs adults often rely on many resources and government benefits to maintain their standard of living. Without careful consideration of your loved one’s potential future needs any inheritance, assets or legacy you leave behind could impact their eligibility for SSI, Medicaid and other government benefits. Take a look at how special needs trusts can help.

Supplement trusts have special rules

A supplemental needs trust allows you to continue to provide for your relative when you die. It enables you to preserve their eligibility for government benefit programs, such as SSI and Medicaid by directly gifting their assets to the trust instead of them. Assets that are attached to a special needs trust still go to the beneficiary, but they lack the authority to manage/access them. Administration duties fall to the trustee.

Choose a trustworthy trustee and provide instructions on how the trust administrator must disperse or manage the assets. Keep in mind that supplemental trust heirs cannot receive income or funds directly from the trust, or they could become ineligible for SSI and Medicaid benefits and other critical resources. However, the trustee may use the assets to acquire medical equipment, housing, education, health care, and other goods and services for the beneficiary.