Being mindful of your estate plans is always important, but it becomes even more critical when one of your anticipated beneficiaries has a diagnosed disability. That is, you may understandably worry about how your estate plan can provide them with long-term financial security when you are no longer around to provide it yourself, all without jeopardizing the government benefits (i.e., Supplemental Security Income, Medicaid, etc.) they collect and require. With that being said, please continue reading to learn how to craft your estate plan to consider your loved one with a disability, and how one of the experienced Butler County special needs planning attorneys at Heritage Elder Law & Estate Planning, LLC, can help you do so accordingly.
How do I make my estate plan for a loved one with a disability?
You may have heard of a trust having benefits that a will document does not. But if you have a loved one with a disability, what may be more beneficial for them is a special needs trust. Simply put, this is a legal arrangement that holds money or property for your loved one with a disability without giving them direct ownership over it. In this way, these assets may not count against their government benefit limits.
Creating a special needs trust for your loved one may help them pay for expenses that their government benefits generally do not cover, thus improving their quality of life. Examples of such long-term or life-long expenses may include their therapy sessions, transportation, education, recreational activities, assistive technological devices, etc. Now, there are varying special needs trusts you may choose from, and they read as follows:
- First-party special needs trust: This trust type is funded by the assets already belonging to your loved one with a disability (i.e., personal injury settlement, inheritance from a deceased relative, etc.), but it is a way to ensure that they do not go over the resource limits for their government benefits.
- Third-party special needs trust: This trust type is funded by an outside individual wanting to use their excess assets to benefit a loved one with a disability for the rest of their life, even when they themselves are no longer around to support them.
- Pooled special needs trust: This trust type is funded by multiple individuals with disabilities, while a nonprofit organization manages these pooled funds through investments and maintains separate sub-accounts for each beneficiary.
Do I also need guardianship or conservatorship for my loved one with a disability?
Once you get your special needs trust squared away, including assigning an appropriate trustee to run it, you may turn your attention to potentially establishing a guardianship or conservatorship for your loved one with a disability. Generally speaking, a guardianship may be necessary if your loved one reaches adulthood and is unable to make informed decisions about their healthcare or daily living needs overall.
Then, a conservatorship, often part of a guardianship of the estate, may specifically focus on managing your loved one’s financial affairs and property if they are deemed a legally incapacitated adult. In short, you may want to create a guardianship of the person to protect your loved one’s well-being, while a guardianship of the estate may be important to protect your loved one’s property from being wasted or dissipated.
For further legal guidance, please look no further than one of the skilled Butler County estate planning attorneys. When you work with Heritage Elder Law & Estate Planning, LLC, you can trust that you are in good hands. Schedule a consultation with us today.
