Despite a significant increase in the number of children described as special needs, there still exist many misconceptions about how their parents should plan their estates. As discussed in a Wall Street Journal article titled “No You Don’t Need to Disinherit a Child With Special Needs”, one of the most common misconceptions is that a special needs child should be disinherited in order to protect their government benefits. This is simply not true. With careful planning, government benefits can be preserved AND a special needs child can be included as an heir – helping you provide for them long after your passing.
A special needs trust allows money to be set aside to provide for a better quality of life. For example, let’s say you have a special needs son who qualifies for Supplemental Security Income (SSI) and Medicaid benefits because his countable assets are less than $2000.00. Any inheritance would cause government benefits to be cancelled. If however his inheritance is properly set aside in a special needs trust, then it can be used for his special needs that Medicaid and SSI do not cover. This may include additional care, vacations, a new television or new clothing. Essentially, this money can enhance quality of life for someone who relies entirely on government benefits.
It is important to note that a poorly drafted special needs trust can result is the loss of benefits. This is why it is so important to seek professional assistance from someone who truly understands Medicaid and estate planning. The money set aside in a special needs trust can provide a much better quality of life for your child and allow you to continue to provide for them – even when you can no longer be there.