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Horizon Elder Law & Estate Planning Blog

Monday, June 24, 2019

Special Needs Trusts for Children with Disabilities

Estate planning is done for the purpose of providing for both yourself and your loved ones during your lifetime as well as upon your incapacitation or death. One of the main reasons for estate planning is to ensure that your loved ones are taken care of once you have passed. This is made all the more important when an individual has a child who is disabled. 

Once an individual with a disability reaches the age of 18, they are treated as an adult by the government. An individual who became disabled prior to the age of 22 is entitled to Social Security Income (SSI) benefits so long as they have less than $2,000 in assets and their income remains lower than the amount of money that they would receive in SSI benefits. 

What is a Special Needs Trust?

There is a special type of Trust, which is intended to pass an inheritance to a child with a disability. This is called a Special Needs Trust, or a Supplemental Needs Trust. Special Needs Trusts can either be held within a Revocable Living Trust, or can be established on its own. This allows other individuals to contribute either by making annual gifts or through their own Living Trust. 

Special Needs Trusts are created to provide for various things. SSI benefits are designed for the purpose of food and shelter. The individual who serves as the trustee of the Special Needs Trust is able to purchase things for the beneficiary of the trust. This may include necessities such as vans, wheelchairs, caregivers, computers, and toiletries without reducing the SSI benefit. 

Should a trustee provide the beneficiary with either food or shelter, the SSI benefit will be reduced. However, it will not eliminate the benefit. Additionally, if an individual on SSI is the beneficiary of a retirement plan it could also reduce or eliminate their SSI benefit. If the beneficiary receives an inheritance he or she will lose benefits until the beneficiary spends all of the money. 

Horizon Elder Law & Estate Planning, Inc. Helps Those in California Who Are in Need of a Special Needs Trust

It is important to design a Special Needs Trust in a manner that protects the beneficiary with the disability. This is done by understanding how the SSI benefit works as well as how to make distributions in a way that does not affect the benefits. 

In order to best design a Special Needs Trust it is in your best interest to consult with a knowledgeable and experienced estate planning attorney. At Horizon Elder Law & Estate Planning, Inc., we understand the intricacies of properly designing an effective Special Needs Trust. Attorney Julie Fiedler, RN understands the needs of those with disabilities. We have your best interests at heart. To learn more or to schedule a consultation, visit Horizon Elder Law & Estate Planning, Inc. online or call us at 925-275-5509 today!

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