A lot of people think that estate planning is nothing more than dictating who will receive your assets once you pass away. While that’s certainly a major part of estate planning, it’s really an oversimplification of what estate planning can do for not only you and your estate, but also for your loved ones. A special needs trust serves as a perfect example.
What is a special needs trust?
A special needs trust is an estate planning vehicle that allows you to put money away for a loved one who requires special care and/or treatment. This trust is irrevocable, meaning that you can’t remove any assets that you’ve placed into it. While that might sound restricting, there are numerous benefits to a special needs trust. One of the biggest is the fact that income that your loved one receives from the trust will not count government benefits income requirements. Many programs require an individual to be below a certain income level to receive benefits, so a special needs trust can provide your loved one with additional support without affecting their eligibility for programs like Medicaid and Social Security disability.
It’s important to be aware that there are some restrictions on how income derived from a special needs trust can be used. In other words, your loved one simply can’t use that money to go buy a new wardrobe. Generally speaking, those funds have to be tied to your loved one’s care or treatment in some fashion, but to learn the bounds of that restriction it’s probably best to speak with your attorney.
Develop the holistic estate plan you need
A special needs trust is just one example of how an estate plan can be broad in scope ensuring that your loved ones are cared for in accordance with your wishes. One of the best things about estate planning is that is completely customizable to meet your needs. So, to learn how to create the estate plan that best fits your set of circumstances, it might be wise to sit down with an attorney who is experienced in this area of the law.