Spend even just a little time planning your estate and you’ll quickly realize that there are a number of different ways to protect your estate and provide for those you love. A living trust, for example, can protect your assets from probate and even minimize the amount of estate taxes your heirs will pay after you’re gone.
A living will can ensure that your preferences on health care matters are honored and if you have pets, you can even create a pet trust to make sure they enjoy a happy, healthy life even after you’re gone.
But how do you provide for a disabled dependent? How can you give them the financial support they need without risking their eligibility for important governmental benefits?
If these are questions you’re asking, then you need a Special Needs Trust.
Also referred to as a Supplemental Needs Trust (SNT), this type of trust is designed exclusively to provide for heirs with special needs. If set up correctly, SNTs will not conflict with government assistance nor will they decrease the amount of benefits that your dependent can receive.
The reason an SNT works is that eligibility for Medicaid and other government assistance programs is based upon the applicant’s assets and income. Simply leaving your estate to your disabled dependent outright with a Will could potentially disqualify your dependent, but with an SNT, the assets are held in the name of the trust rather than in your dependent’s name. As such, the value of the trust is not considered when analyzing your dependent’s eligibility.
This ensures that they’ll continue to receiving Medicaid, Social Security Income and other much-needed benefits while still enjoying the benefits of the trust.
Like many other trusts, a Special Needs Trust can become very complex and because of the strict guidelines for these governmental programs, you want to ensure that your Special Needs Trust is set up correctly. A qualified estate planning attorney can help you make sure that your SNT does not interfere with governmental benefits.
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.