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Estate Planning for a Special Needs Child or Relative

Posted by Andrew Byers | Jun 26, 2015 | 0 Comments

My niece will need lifelong care due to a developmental disability, and I'd like to include a provision for her in my estate plan. How can I ensure this will not interfere with her eligibility for benefits? 

Estate planning to include a special needs child or relative should be done with great care and consideration of the beneficiary's financial situation. While it is undoubtedly noble to provide for the regular care and maintenance of a loved one, many special needs individuals also receive benefits from both benevolent charities and government programs – some of which may be needs-based. In order to ensure the beneficiary receives the financial care he or she needs – while also helping to maintain this eligibility status – be sure to meet with an experienced estate planning attorney in Auburn Hills as soon as possible. 

Planning for a Government Beneficiary Recipient 

Proper precautions should be taken when estate planning for the benefit of an individual receiving Supplemental Security Income (SSI), Medicaid, and/or Social Security Disability Income (SSDI), as these programs operate based on a recipient's financial need. Leaving a lump sum outright or in trust for a government beneficiary will drastically increase his or her personal asset calculation, and could actually work to impose a penalty (i.e., loss of benefits) for months – or even years – after receiving the gift. 

A better option is a tool known as a Special Needs Trust (SNT), which allows the grantors an opportunity to appoint a trustee over the funds, which are held entirely by a third-party for the benefit of the special needs individual. During the person's life, the corpus of the trust is not accessible and may only be distributed in the sole and absolute discretion of the appointed trustee. From the standpoint of the federal and state governments, these assets are not considered within the control of the beneficiary, and will therefore not preclude him or her from receiving much-needed government assistance. 

Special needs planning is a highly-specific area of law that should be left to one with experience and wisdom. In addition to properly arranging the inheritance, other considerations could include the implementation of a guardianship over his or her person and property – as well as several other legal procedures that may become necessary. 

For help with special needs planning, please do not hesitate to contact Auburn Hills attorney Andrew Byers at (248)301-1511 today. 

About the Author

Andrew Byers

Andrew Byers' elder law practice focuses on the legal needs of older clients and their families, and works with a variety of legal tools and techniques to meet the goals and objectives of the older client. Under this holistic approach, I handle estate and longevity planning issues and counsel cli...

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