This message may apply to you even if you don’t have a special needs child. Your surviving spouse may fall under the category of special needs. By definition, a special needs individual is a person who, because of their disabilities, has specific and special needs that are not always covered by traditional government benefits. In many cases, people with special needs or disabilities rely on Medicaid and Medicare as a form of insurance. It’s their way to pay for the care they need. For instance, someone with Parkinson’s could be eligible to receive the benefits we are talking about.
What Happens To Them When Something Happens to Us?
What happens to the special needs—children included—people in our lives when something happens to us? People can have disabilities from birth, or they could be diagnosed in the later stages of their lives.
There have been instances when other attorneys or financial advisors have told people they cannot leave an inheritance to someone with special needs. People then plan to exclude these people from their estate planning and leave the money to others, assuming they will use the funds to provide for the person with special needs.
This is not the only option because you must provide for the special needs people by setting up a special needs trust. The best starting point for grandparents and parents of special needs individuals is through a revocable living trust instead of a will.
Why You Should Choose A Revocable Living Trust
Although these trusts will bypass probate, this is not the main reason why you should choose them. Remember that avoiding probate means retaining privacy, which is very important to many people. The main reason why you want to leave an inheritance to someone with special needs through a revocable living trust is because of funding.
You cannot fund special needs trusts set up in a will. However, you can fund them with your retirement accounts and life insurance policies. There are even policies that people can purchase for the sole purpose of funding trusts that will inevitably go to their loved ones for the rest of their lives. Retirement accounts and insurance policies have beneficiaries on them. One of the biggest mistakes you can make regarding beneficiary designations is not naming one or naming your estate. Naming your estate is the only way to fund a testamentary special needs trust in your will. However, you can do this with a revocable trust.
By beginning your estate plan with a revocable living trust, you can title your assets in the name of the trust. When you pass away, you have assurances that the trust has already been funded, and the person with special needs will subsequently be provided for.
Begin Planning with J. Kevin Tharpe
If you have a loved one with special needs, ensuring their care and financial security for the future is crucial. Planning with a revocable living trust can give you peace of mind, knowing that your assets will be managed appropriately and accessible to support them without risking their eligibility for essential benefits like Medicaid and Medicare. Don’t leave this important responsibility to chance. Schedule a consultation with us today to learn more about special needs trusts.
Kevin Tharpe
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