The estate plan is a conundrum for many Americans, especially with the increasing ageing population. Yet, families with a member with special needs have their own puzzle to handle, which includes preparation that is different from others. In particular, a special loved one needs poses a specific “how to provide” challenge in the event that no one, usually near family, is left to care for that person.Check out Special Needs Trust Attorney near me for more info.
The problem: Generally, Americans with special needs obtain benefits such as SSI or SSDI from the government entitlement programme. One of the challenges faced by family caregivers is leaving their loved one with assets or a “financial support structure” while preventing loss or ineligibility of the entitlement at the same time. One of the common financing mechanisms for the care scheme is life insurance. For those who are unaware, however, SSI, Medicaid, and SSDI have stringent regulations about the assets and income of beneficiaries, even if it is inherited – in view of this, such services fall grossly short of being able to finance many of the “quality of life” expenses deserved by the individual with special needs: basic luxuries such as televisions, cell phones, holidays, or dental expenses such as dentist care.
The Solution: The person with special needs should not resign the idea of getting funds set aside for their “quality of life.” However the preparation of their caregivers should not be “pigeonholed” into the “prototypical estate plan” that can apply to those without a family member with special needs; this is not to imply that for everyone there is a “one-size-fits-all” plan, as each family invariably has its own specs. However, planning issues for people with special needs take on a dimension of their own that includes attention to (1) the treatment priorities after the point in time when care is not feasible as with injury or death, and (2) creating a strategy that works within the narrow regulations and requirements required by the federal and state entitlement programmes regarding the finances of a recipient.
Fortunately, services such as SSI and Medicaid consider the limitations on the funding they offer, thus acknowledging the right of people to “quality of life” for special needs, as well as the ability of their families to reserve money for this reason. As a result, special needs planning includes matching the needs of the child and the family with the entitlement policies of the government. A will and/or life insurance policy, therefore is obviously not enough.
It includes a planning instrument known as either a Special Needs Trust (SNT) or a Supplement Trust. By means of a testamentary (upon death) SNT, such a trust can be established using a will or the trust can be rendered individually, which is always the preferred option because of probate. The testamentary SNT will also need to go through the process of probate, creating a pause, while the stand-alone SNT fully removes probate. In any case, by retaining possession and control over the funds and assets, the SNT and/or Supplementary Trust circumvents income and wealth constraints. In it a “maintenance provision gives the trustee the power to make only certain distributions that do not violate expenses accepted as appropriate by federal and/or state administrative agencies for “quality of life” The consequence for members of the family with special needs is a pool of funds for a better life while maintaining substantial entitlement benefits.