• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
  • Services
    • Asset & Business Planning
    • Dental Practice Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid and Elder Law
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Carmel, Indiana Elder Resources
        • Fishers Indiana Elder Law Resources
        • Greenfield, Indiana Elder Law Resources
        • Greenwood Elder Resources
        • Indianapolis Elder Law Resources
        • Lawrence Elder Law Resources
        • Plainfield Elder Resources
        • Zionsville Elder Law Resources
    • Estate Planning
      • Estate Planning Checkup
      • Estate and Gift Tax Figures
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Asset Protection Planning
        • Business Succession Planning
      • Elder Abuse
      • Elder Law
        • Medicaid
        • Medicaid Planning
        • Planning for Long-Term Care
      • Estate Planning
        • Avoiding Estate Taxes
        • Estate Planning for Parents
        • Frequently Asked Questions for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Women and the Need for Estate Planning
      • Financial Planning
      • Incapacity Planning
      • Legacy Wealth Planning
      • Pet Planning
      • Philanthropy in Your Estate Plan
      • Probate
      • Power of Attorney
      • Small Estate Administration
      • Trusts
        • Trust Administration
        • Trust Administration
        • Serving as Executor
      • Understanding Your Social Security Retirement Benefits
      • Wills
        • Contesting a Will
    • Newsletter
    • Pre Consultation Form
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Carmel, Indiana Probate Resources
        • Greenfield Probate
        • Greenwood Probate
        • Indianapolis Probate
        • Plainfield Probate
        • Indiana Probate
        • Zionsville Probate
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Areas We Serve
    • Boone County
      • Lebanon
      • Zionsville
    • Hamilton County
      • Carmel
      • Fishers
    • Hancock County
      • Greenfield
    • Hendricks County
      • Brownsburg
      • Plainfield
    • Johnson County
      • Franklin, Indiana
      • Greenwood
    • Marion County
      • Central Indiana
      • Indianapolis
  • Blog
  • Contact Us

Frank & Kraft, Attorneys at Law

Indianapolis Estate Planning Attorneys

CONNECT WITH US TODAY(317) 684-1100

Attend a Free Workshop
Home » Estate Planning Articles » How to Leave an Inheritance for Your Special Needs Child

How to Leave an Inheritance for Your Special Needs Child

July 31, 2012

Compliments of Our Law Firm,
By: The American Academy of Estate Planning Attorneys

We all want to make sure our children are financially secure after we’re gone. But accomplishing this means more than just deciding what portion of your estate each child will inherit. It also means determining how and when each child will receive their inheritance. When you have a child with special needs – particularly when that child depends on government benefits like Medicaid or Supplemental Security Income (SSI) – how you pass on an inheritance becomes an absolutely critical question.

Need-Based Assistance

Your child’s eligibility for these programs is based on their income and resources. This means that if you pass away leaving even a modest inheritance directly to your child, they could be pushed over the strict eligibility limits for their government benefits. As a result of their inheritance, your child could lose Medicaid or SSI benefits, at least until they use up their inheritance and once again meet the eligibility requirements. With you gone, they would find themselves in quite a different situation when they again qualified for benefits.

During your lifetime, your child’s government benefits pay for much-needed basic care and services, while you help pay for all the extra comforts that enrich and improve your child’s quality of life. If you were gone and they had been forced to deplete their inheritance, your child could be left with the bare minimum provided by government assistance, and no more.

Special Needs Trust

One way to leave your child a full inheritance while ensuring that their benefits continue uninterrupted is to establish a Special Needs Trust. If you already have a Revocable Living Trust, you can accomplish this by doing two things: including the appropriate special needs language in your already-existing Trust, and making sure your child’s Trustee understands the very specific rules that apply to Special Needs Trusts.

Since the government counts mandatory Trust distributions as income to your child, your Special Needs Trust must be structured so that the Trustee has full discretion over when to make distributions for the benefit of your child. And since government rules provide that funds from Special Needs Trusts can only be used to supplement your child’s benefits, rather than to provide necessities, the Trust document needs to limit distributions to supplemental purposes only.

This means the Trustee can’t use the Trust to pay for things like food, housing, clothes, or routine medical bills for your special needs child. Otherwise, the assets of the Trust will be considered when it comes to Medicaid or SSI eligibility. Instead, the Trust can be used to cover a range of supplemental expenses for your child’s benefit, including paying for recreation, entertainment, and vacations, funding hobbies, and covering educational costs.

No one can replace the nurturing, love, and support you provide to your child on a daily basis. However, the idea behind a Special Needs Trust is to help fill the financial gap after you’re gone, allowing your child to keep her government benefits while enjoying a quality of life similar to the one she’s always had.

It’s important to understand that benefits planning is a highly specialized area of law that involves a complex interplay of state and federal rules. The requirements vary from state to state, and if you are not aware of your state’s specific rules, your child’s chances of eligibility for government assistance can be severely diminished. It is essential that you consult with an attorney who is experienced not only in estate planning, but also in special needs planning. Otherwise, you could end up with a plan that does not comply with your state’s rules, and your special needs child could lose valuable benefits.

Primary Sidebar

Frank & Kraft, Attorneys at Law

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Where We Are

Frank & Kraft Attorneys at Law
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN 46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111

See Larger MapGet directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

frankkraft_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

Frank & Kraft Attorneys at Law
Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.

© 2023 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us