An Indianapolis inheritance planning attorney can help you to make an appropriate plan for transferring an inheritance to your loved ones after you pass away. It is important, as you make your plans, to consider any circumstances affecting your heirs or beneficiaries that could make it difficult or impossible to simply transfer wealth to them. While a direct transfer of assets using a will or other estate planning tools is often the easiest approach to making an inheritance plan, sometimes this approach is not practical and could be detrimental.
Frank & Kraft can help you to evaluate the circumstances of your heirs or beneficiaries that could affect their ability to directly inherit money or property from you. For example, if you plan to provide an inheritance to someone who has special needs, it may be very important to make a specific plan to transfer assets that will not cause substantial problems for your loved one who stands to inherit.
An Indianapolis inheritance planning attorney at our firm will explain to you the serious drawbacks associated with simply giving an inheritance to a person who is disabled and will help you to explore alternative options for providing for a loved one who has special needs.
Why You Cannot Directly Provide an Inheritance to a Loved One With Special Needs
When someone you love has special needs, you may want to provide a generous amount of money to that person to enhance his quality of life. Whether you wish to give an inter vivos gift during your lifetime or you wish to leave money to your disabled relative after your death, your generous gift could cause serious problems.
One big issue: your disabled loved one may be receiving Medicaid, which is a means-tested government benefits program. Your disabled loved one may also be receiving income through another means-tested program, called Supplemental Security Income. These two programs could provide monthly income and coverage for medical care. Access to both could be lost if you give your loved one substantial assets, which now count as his financial resources and thus disqualify him from benefits meant for people with limited incomes and few resources.
Another problem: your disabled loved one might not be able to manage the inheritance you provided. When not properly managed, the wealth you have left to care for your loved one could be quickly lost.
What Should You do to Provide for a Loved One with a Disability?
The good news is, there are ways to use legal tools to resolve both of the big issues associated with leaving assets to someone who has a disability. An Indianapolis inheritance planning attorney can help you to make use of a legal tool called a special needs trust. A special needs trust, also known as a supplemental needs trust, is specifically designed to allow someone who is disabled to inherit without being at risk of losing important benefits.
Frank & Kraft will work with you to create a special needs trust in appropriate circumstances to provide for the supplemental needs of a disabled loved one who is receiving means-tested benefits. The process of creating this type of trust will involve naming a trustee who is in charge of the management of trust assets. You’ll name the disabled person as the trust beneficiary and will spell out in your trust document how the assets in the trust should be used to provide a better life for your disabled heir.
While there are some limitations on what the money in the trust can be used for – it cannot, for example, be used to pay rent or otherwise used for purposes where it is equivalent to cash – the funds can be a great benefit to a person who may not be able to earn a living as a result of being disabled.
How an Indianapolis Inheritance Planning Attorney Can Help
An Indianapolis inheritance planning attorney at Frank & Kraft can provide personalized one-on-one advice during your estate planning process. Whatever unique circumstances your heirs or beneficiaries face that could affect their ability to inherit, we can help you to find the right solutions to overcome these issues and take care of the people you love.
To find out more about how we can assist you, join us for a free seminar. You can also give us a call at 317-684-1100 or contact us online to get personalized advice on making your inheritance plan. Don’t wait until it is too late to make appropriate provisions to protect an inheritance and provide for your family. Give us a call today to get your plans in place.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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