For those of us worried about leaving loved ones afflicted with a disability an appropriate inheritance that will allow for appropriate, life-long care, careful planning is needed. Disabled persons who are qualified to receive necessary government assistance, such as supplemental security income and Medicaid benefits, may find themselves suddenly disqualified in the event they get an improperly planned inheritance, meaning they’ll be deprived of life-saving financial assistance.
Even modest monetary gifts can disqualify a disabled person from receiving state assistance – inheritances of $10,000 in cash will immediately bump them above the qualification standard. In order to leave them money, you will need to set up a specific kind of inheritance package called a ‘special needs trust’ or supplemental needs trust, which allows you to get around qualification standards by leaving property to the trust rather than the person directly.
The trust acts as a separate legal entity whose funds and property can be allocated to a singular person – the beneficiary – and is managed by an appointed trustee who will be spending the money on their behalf. Since the money is not in control of the beneficiary, it won’t be considered when determining eligibility for SSI and Medicaid.
The money in the trust can’t be given directly to the beneficiary, since that would once again play a role in determining eligibility, but the trustee can allocate funds for buying both essential goods and services and those that would enhance their quality of life. Caregivers, vacations, vehicles, and necessary out-of-pocket medical fees are all items the trustee can purchase for the beneficiary.
Special Needs Trusts can take the form of either individual or ‘pooled’ trusts. Pooled trusts involve an independent third party (usually a nonprofit organization) setting up a trust in which a number of different people can donate their money to be invested and allocated to their beneficiaries in the event of their death or incapacitation. These pooled trusts are usually used by people who can’t find a suitable trustee or are leaving a modest sum and either can’t afford or don’t see the need in creating their own separate trust.
If you live in Orange County and are looking to form a special needs trust for a loved one, we recommend looking into Burris Law. As one of the rising stars in the O.C. law scene, Burris Law emerged from one of the most prestigious real estate law firms in the county to provide representation for a quickly growing client base whose needs were reaching outside the bounds of the firm.
Burris Law has helped dozens of clients set up wills, trusts, and inheritances that ensure their beneficiaries receive the maximum of what their loved ones left to them. Clients have noted the efficiency of their service, as well as the helpfulness, responsiveness, and the general good will they have for their client base.
None of us want to leave our children or loved ones with nothing once we pass on, and that goes double if they happen to have life-altering disabilities. A well-planned trust may make the difference between their lives proceeding smoothly without us and a life already filled with hardship becoming that much more difficult.
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