If you are the parent, grandparent, or caregiver of a special needs child care must be taken when including your special needs child in your estate plan. Simply gifting assets to your child, however well intentioned, could cause more problems than it will solve. At the same time, providing for a special needs loved one in your estate plan is typically even more important than providing for other loved ones. One way to ensure that your special needs child is provided for in your estate plan without creating additional problems or issues is to establish a special needs trust.
Special needs children eventually grow up to be adults. Many adults who are considered special needs individuals live extremely autonomous lives and need very little assistance while others continue to need a great deal of assistance on a daily basis. Assistance is typically provided by state and federal programs such as Medicaid, Supplemental Security Income (SSI), and other similar programs. Eligibility for those programs depends, in part, on the income and resources of the applicant. To qualify, and to retain benefits, an individual’s income cannot exceed the program limits. In addition, the value of an applicant/participant’s countable resources cannot exceed the program limits. This is where simply gifting assets to a special needs loved one can create problems. A gift, whether it is in the form of cash, property, or other assets, can cause your loved one to lose his or her eligibility for much needed assistance programs. A special needs trust offers a solution.
A special needs trust, also referred to as a “supplemental needs trust”, is a specialized type of trust that will allow you to gift assets to a special needs individual without jeopardizing eligibility for assistance programs. The trust assets may be used to supplement the care provided by federal and state programs; however, there are strict rules regarding what the assets may, and may not, be used for so care must be taken when using assets held by a special needs trust. In addition, specific language must be used in the trust agreement in order for the trust to be recognized as a special needs trust by federal assistance programs. For this reason it is in your best interest to consult with an experienced South Carolina estate planning attorney if you believe a special needs trust could be a beneficial addition to your estate plan.
Contact the experienced South Carolina estate planning attorneys at Kuhn & Kuhn Law Firm by calling 843-577-3700 to schedule your appointment.
John Kuhn, Estate Planning Attorney
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