Failing to plan can impact special needs beneficiary, benefits

By Jada Gaines CONTRIBUTOR

We have heard time and time again that estate planning is one of the most procrastinated topics in society. Of course, failing to plan can leave your loved ones in shambles having to figure out “what happens next.”

However, have you ever taken into consideration how failing to properly plan for a loved one with special needs, or who receives government benefits, can negatively impact them in the future?

Proper planning for someone with special needs is critical to make sure, among other things, that the loved one is finan- cially taken care of when you are no longer here.

In fact, you should know that leaving an inheritance outright (meaning the beneficiary receives their inherited share with no restrictions) to a person with special needs could result in:

1. The inheritance being viewed as the person’s financial assets and would be counted towards determining their eligibility for both federal and state assistance programs such as SSI, Medicaid, etc.;

2. Complete loss of government benefits for things such as medical treatment, including any caregivers, education, housing etc. and;

3. The individual being responsible for using their inheritance to cover costs of all living and medical expenses until they become eligible to receive government benefits again.

What’s the alternative? Well, some peo- ple, who have not been properly informed of their options, decide to disinherit their child or loved one with special needs ¬ but that is not the answer! There is no reason to specifically disinherit someone from your estate plan just because they have special needs and may lose their benefits.

Of all of your intended beneficiaries, the one with the special needs is the one who likely needs the funds the most. The better option and most strategic way to handle this situation is to direct that their inheritance go into a “special needs trust” or “supplemental needs trust.”

This type of trust helps to provide individuals with financial support without resulting in them being disqualified for government benefits. This simply mean that it’s a way that your loved one with special needs will be able to still inherit from your estate without losing their benefits. Doesn’t that sound like a much better option than just disinheriting the special needs person? It can’t be stressed enough that special needs strategies in estate planning is as important as it is to create a well-crafted estate plan. Keep in mind that though you may not currently have a loved one who fits into this category, situations change, accidents happen, and health conditions also change. Therefore, it could be that at the time of distribution of your estate, one of your intended beneficiaries may then be a special needs person. If you have failed to plan for that possibility, then that loved one could lose benefits that they could receive.

To ensure the best outcome for a special needs beneficiary, speak with an estate planning attorney who also focuses on special needs planning.