Lincoln Special Needs Planning & Elder Care Lawyer
The future is unpredictable, which makes planning for it more difficult. This is particularly true for those who have family members with special needs that they must take into account. However, the needs of those family members make planning that much more important. When considering estate planning options that account for family members with special needs, you should think about not only their physical care for quality of life but their financial care as well.
The estate planning attorneys at Stange Law Firm understand how delicate this process can be in order to ensure the stability of life that a family member with special needs may require. Our team knows the benefits of utilizing special needs trusts that will help to confidently supplement the financial support required to meet daily needs. We also understand that incorrect estate planning with special needs considerations can turn disastrous and put your family at greater financial risk. Working with our attorneys can help to ensure the right needs are being met in Lincoln, NE.
Special Needs Trusts
Commonly referred to as a supplemental trust, a special needs trust is a specific type of estate planning that is used when you want to protect the financial future of a family member that has a physical or mental disability. Those with special needs may receive government assistance benefits such as Medicare, and often people are hesitant to change any financial circumstances because they fear they could lose out on that benefit. However, a special needs trust is a way to protect your loved one’s financial future without jeopardizing those benefits.
The federal government allows for two particular trust types to be established to help support the financial impacts of living with special needs. These include:
- Third-Party Trusts. A third-party trust is one that is set up by the legal guardian of a person with a disability, such as a parent or grandparent. The party that establishes the trust is responsible for funding it.
- Self-Settled Trusts. This type of trust is established by the individual with special needs as long as they are under the age of 65 when it is established. They are responsible for contributing their own assets to the trust.
Utilizing one of these trusts is a way to set specific finances aside that are distributed in a specific way to ensure that everyday financial needs can be met for the person with special needs. Unlike a bank account, a trust disburses money for specific reasons and at specific times.
A third type of trust is known as a support trust and is considered the most efficient way to help a person with special needs meet financial obligations for things like everyday hygiene, transportation, clothing, utilities, and more. However, a support trust does not protect the ability to receive benefits from Medicaid or Social Security.
Expenses Covered By a Trust
In order to protect the qualifications for government programs, the assets in a special needs trust must only be used to meet certain expenses that help to maintain a quality of life. These expenses include:
- Health and medical care
- Dental and eye care
- Social opportunities
- Legal services
- Consultant services
- Special education
- And much more
This supplemental income is there to support the day-to-day needs of living with a disability. Funds from government programs are there to fund necessities such as clothing, transportation, and more.
For many with a disability, they can feel discouraged and sense that they have lost some freedom in their life because there may be certain dependencies on others. While a trust can be an important step in helping to care for a family member with special needs, it can also contribute to the loss of freedom. Unlike a bank account, the beneficiary cannot simply take money out. The funds are controlled by a trustee from which funds must be requested.
Why Is a Special Needs Trust Important?
Establishing a trust is a long and complex process that deters many from utilizing them. However, the benefits that they offer go well beyond the complexities. Because a special needs trust sets aside assets and is funded up front, it protects the financial needs of a person with a disability. It also allows them to remain qualified for government benefits to support their needs. This allows them to maintain their quality of care regardless of the financial hardships that could impact income later.
One of the largest ways a trust protects government benefits is in the way it is calculated into income. The government benefits that a person with special needs qualifies for are based on their income. If money is held in a guardianship, it will count as income and could disqualify their eligibility for benefits. However, a trust is structured differently in that if a beneficiary dies or when the trust is considered to have legally ended; the funds are either returned to the third party that established the trust or paid back to Medicaid for certain expenses.
Establishing a Special Needs Trust
Knowing when to establish a special needs trust is up to the individual’s decision. However, many will consider taking this step while the family member with special needs is still a child. This protects the financial resources they will need as they age and create a path for supporting themselves through independent living. There will still exist many challenges, but eliminating the fear and worry of meeting financial obligations can help to ease their stress and allow them to feel a sense of independence that they may not have had otherwise.
Lincoln Trust Attorney
Making important financial decisions for your family is a part of any estate planning. At Stange Law Firm, we know that this process is even more important when you take into consideration family members with special needs. Ensuring they have the financial stability to maintain their quality of life is important. With our estate planning attorneys, you can create the peace of mind that you and your loved ones want when considering the needs of long-term care. If you have questions about special needs trusts or are ready to establish a trust for your loved one, contact our offices and let us help you set a plan for the financial future that may be needed.
Lancaster County (Lincoln), Nebraska Office (402-204-5002) | 421 S. 9th St., Suite 205, Lincoln, Nebraska 68508