Supplemental Needs Trusts- Essential Estate Planning Components
Posted on: 4 March 2019
Having a family member with disabilities can pose a challenge. Depending on the severity of the disability, your loved one may be unable to live alone or generate an income.
If you are providing a high level of care for your loved one, you may worry about his or her well-being after your passing. Fortunately, there is a vital estate planning tool that you can utilize to help ensure the needs of your disabled loved one are taken care of after your death.
This tool is a supplemental needs trust.
Appoint a Trustee
One of the most significant benefits that a supplemental needs trust can offer is the ability to let you appoint a trustee. The sole purpose of a trustee is to oversee and manage the assets held within the trust. This individual can be a trusted family friend or an attorney.
If you have a loved one with a disability that would make it hard for him or her to manage financial and physical assets alone, then having the ability to appoint a trustee can give you the peace of mind you need.
Preserve Government Aid
Many disabled individuals receive financial help through various government programs. The way that you structure your estate could have an effect on the amount of money your disabled loved one receives.
If you bequeath assets to a disabled person outright, the value of these assets will be taken into consideration when calculating benefit needs. A trust allows you to avoid establishing ownership of assets in an individual's name. This can preserve vital government aid that your disabled loved one will need in the future.
Ward Off Creditors
Disabled people can incur debt. Medical bills or loans that are taken out in the name of the individual could be passed on to a collection agency if they remain unpaid. You don't want the assets that you leave to your loved one after death to be taken by creditors.
A supplemental needs trust protects all assets held within the trust from creditors. This means that no matter what happens in your disabled loved one's life after you pass, he or she will have the financial resources to live comfortably.
Trusts are simple estate planning tools that can help you ensure your loved ones are cared for after your death. Talk to your attorney about a special needs trust if you have a disabled family member.
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