There are some advanced estate planning concerns that can enter the picture when certain extenuating circumstances exist. For example, there are some very specific steps that you may want to take if you want to make a loved one with special needs more comfortable.
Let’s look at the facts.
Source of Income
Many people with special needs cannot earn income on their own. There are essentially two different government programs that provide income for people with disabilities: Social Security Disability Insurance, and Supplemental Security Income.
When you pay taxes while you are working, part of what you pay goes into the Social Security program. If you have accumulated sufficient credits, you can potentially qualify for Social Security Disability Insurance if you ever become unable to work due to a disability.
This program has nothing to do with financial need, so you could qualify even if you have assets to speak of in your own name.
Things are different with Supplemental Security Income. This program is only available to people with special needs who have very limited financial resources. The limit on countable assets is just $2000.
If you wanted to provide for a person with special needs without impacting eligibility for Supplemental Security Income, you could convey assets into a supplemental needs trust. The beneficiary with special needs could not directly handle the assets in the trust, but the trustee that you empower could use assets in the trust to satisfy certain unmet needs. Eligibility for SSI would not be impacted.
We should point out the fact that a supplemental needs trust can also help to preserve Medicaid eligibility. This is a government run health insurance program that many people with special needs rely upon. Medicaid is also a need-based program, so an improvement in financial status could result in a loss of eligibility.
Free Report on Special Needs Planning
Our firm has prepared a well researched, easy-to-read special needs planning report that will provide you with an added level of information about benefit preservation and supplemental needs trusts. This report is being offered to our readers free of charge right now, and you can click the following link to access your copy: Special Needs Planning Report.
Schedule a Consultation
Depending on the circumstances, estate planning can be complicated. Each member of your family is in a different life situation, so your estate plan could include multiple different asset transfer vehicles. If you are fully informed and you take all the right steps, you can provide for each person that you love in the optimal manner.
Our firm can help if you would like to devise a personalized plan that is ideal for you and your family. To set up a consultation, send us a message through this page: Indianapolis IN Inheritance Planning.
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.