Legal Matters

presented by: Bradford & Holliman, Estate Planning

Why Everyone Should Have a Special Needs Trust in Their Plan

Estate plans should include planning for a loved one’s financial and physical protection in the event of a disability. This is often overlooked by individuals that do not currently have disabled loved ones because they do not see such planning as applicable to their situation. Family members that have disabled loved ones are often so consumed with living day-to-day that they never get around to planning. If they do make plans, it often is in response to incorrect information received from non-legal sources.

Why Should I Include Disability Planning in my Estate Plan when no one in my Immediate Family is Disabled? The simple answer is that you never know when something will happen in the future to a loved one that will require disability planning. Having provisions in your Will or Revocable Living Trust that provide instructions on what happens if someone becomes disabled allows you to protect family members in the event of tragic accidents or illnesses that are unforeseen.

What do you mean by a “Disability Plan?” Individuals with disabilities may need someone to manage their newly inherited assets so no one takes advantage of them and squanders the assets. Financially eligible individuals with disabilities may qualify for government benefits such as Supplemental Security Income (SSI) and Medicaid. To protect your beneficiaries, your estate plan must include provisions that address the oversight of the assets and the government regulations surrounding these benefits.

How do I Prevent a Beneficiary from being Ineligible or Losing Benefits? Your Will or Revocable Living Trust should have provisions for a “supplemental needs trust,” also called a “special needs trust” in the event a loved one is disabled at the time you pass away. The language used in this type of trust is compliant with specific federal and state requirements that allow the assets to be used for the beneficiary’s benefit without being counted as assets that can cause the beneficiary to lose benefits or otherwise be ineligible.

Your attorney should help you determine the type of plan you need and prepare the supplemental needs trust for you.

Melanie Bradford Holliman 

Partner, Bradford & Holliman, LLC

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

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