If you have someone in your family that has special needs, and you would like to care for them after you are gone, you need to set up what is called a special needs trust. The reason for doing this is that you may have a substantial number of assets, ones that might make them ineligible for Medicaid or SSI. If that is the case, then you need to create this trust which will prevent your assets from being connected to them, allowing them to have the ability to qualify for these programs. These assets will certainly include all of the cash you have in the bank. Here are a few examples of how things could go terribly wrong if this trust is not set up properly.
Why A Special Needs Trust Is Necessary
Let’s say that you die and you will somebody $10,000. When you do this, and that money is designated for them, they would automatically be disqualified from receiving Medicaid or SSI. However, if you set up a supplemental or special needs trust, the money is not directly left to them. It is left to the trust which is a separate entity. You will need to appoint someone as the trustee that will have complete control and discretion over the property or money that you are disseminating to these individuals. This third-party will be the buffer, along with the trust, between the money you have left, and the person that would be disqualified from these state and federal programs which they need to have two survive.
How Do You Set One Up?
You can set one up very quickly by working with an attorney that will provide you with the necessary paperwork. They will fill everything out for you, and designate how much money you want to give to this person that has special needs. Once it is officially filed, and a trustee has been appointed, you will no longer have to worry about your gift to this person compromising their livelihood. They will be able to take advantage of SSI and Medicaid without any worries about the money or assets that you have left to them after your death.
These are very easy to set up. Most people will find an attorney that will fill out the paperwork, properly filing it so it is active immediately. If you do have someone in your family that has special needs, and you are thinking about leaving the money, this is something you absolutely must do. It will ensure that your gift will eventually get to them, and at the same time, ensure that they will continue to get the funding and insurance that is needed because of their condition.