Estate Planning for Special Needs Beneficiaries

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Estate Planning for Special Needs Beneficiaries

Estate planning is important for everyone. The process can help ensure what you want to happen will happen when you die and if you become incapacitated during your lifetime. When you have loved ones with special needs who you want to include in your estate plan, there are some additional factors you should consider.

estate planning for special needs beneficiaries

One major concern is making sure that any bequests or inheritances can be used for your loved one’s needs, without jeopardizing his or her eligibility for government benefits. Needs-based assistance programs generally have stringent income- and asset limitations, so naming your special needs loved one directly as a beneficiary could have unintended consequences.

One option is to include a Special Needs or Supplemental Needs Trust in your estate plan. This type of Trust is designed to provide assets that can be used to supplement – not replace – benefits your loved one is receiving for things like medical care, food, housing, etc. You will need to designate a Trustee who will have authority to distribute assets on your loved one’s behalf. This could be a family member or friend, but you could also name a corporate trust department or another professional fiduciary in this role.

If you set up a Supplemental Needs Trust, you should also take steps to ensure assets flow through your estate plan in the way you want them to. You may need to retitle certain assets into the Trust or point assets to it through beneficiary designations. Your estate planning attorney can help you identify which assets it makes sense to use to fund the Trust. It can also be beneficial to create a letter with instructions for your Trustee, providing information about your loved one’s abilities and limitations, routines, interests, and any other practical information that may help ensure your loved one will receive the care you want them to have.

To learn more about estate planning for a beneficiary with special needs, contact us today. Our comprehensive services include drafting advance health care directives, HIPAA Authorizations, durable powers of attorney, pour-over wills, guardianship nominations, community and separate property agreements, revocable living trusts, complex trust instruments, and guidance to properly title assets in trust title.