Estate Planning For Disabled Beneficiaries
It makes sense that when you are planning your estate that you would want to make sure that your most vulnerable loved ones are taken care of. However, sometimes your efforts to leave them a large financial gift that you think will help, can actually cost them the benefits that they so desperately need. There are strict rules in Florida for receiving social security disability benefits, which include a limit on monthly income and total assets. Gifts from family and inheritances can increase their income or assets such that they no longer qualify for social security benefits or income. While this may not seem like a big deal if you are leaving them a large sum of money, the cost of health care without medicaid coverage can be astronomical, and will likely wipe out the inheritance within a number of months. For this reason, it’s critical to work with an experienced disability estate planning lawyer to be proactive in planning ahead so that your loved one can be provided for without losing the government benefits that they are entitled to.
Creating a Special Needs Trust
Luckily, just because a friend or family member is receiving disability benefits does not mean that you cannot leave them an inheritance, it just requires more strategic planning. While a lawyer can help you choose the best option for your specific situation, generally, a Special Needs Trust is the most effective way to leave money for a disabled beneficiary without affecting their eligibility. An estate planning attorney can help you create a special needs trust for your loved one. You can transfer assets to this trust while you are alive or through your will. Because the trust is separate from the individual, the trust is the owner of the assets, and they will not count toward the assets or income of the disabled beneficiary. However, there are some limitations. The trust cannot be used to transfer large cash gifts to the beneficiary, as that would count as income and would affect their eligibility. It is also unlikely to be able to be used to pay for expenses like rent and food as that is what the social security payments are meant to cover. However, the trust can be used to cover a lot of other expenses, including caregivers, services that the individual cannot perform due to their disability (such as laundry, cleaning, dog walking, pet care, cooking, etc.), travel, education, internet, and phone. This can relieve a huge financial burden from the disabled individual without compromising their benefits.
Schedule a Consultation with the Law Offices of Larry E. Bray
If you have a disabled loved one and want to ensure that they are taken care of after now or after you are gone without compromising their access to the government benefits that they are entitled to, experienced West Palm Beach estate planning attorney Larry E. Bray can help develop an estate plan that meets all of your needs. Contact the Law Offices of Larry E. Bray and schedule your consultation today.
Resource:
investopedia.com/terms/s/special-needs-trust.asp
