If you have a loved one who lives with a disability and who depends on you for support, you may worry about what will happen to him or her when you pass away. Not only must you concern yourself with how your loved one will manage his or her finances once you are gone but also, you must ensure that he or she does not lose government benefits such as Medicaid, Supplemental Security Income, subsidized housing and vocational rehabilitation. A special needs trust can provide you with the peace of mind you crave when planning your Tennessee estate.
According to FindLaw, many families choose to use a special needs trust to ensure that disabled beneficiaries continue to qualify for government benefits even after they receive a large inheritance. If you make the mistake of leaving your loved one substantial amounts of money or assets through a will or other estate planning tool, you may unwittingly disqualify your loved one for much-needed government assistance. You can avoid this type of outcome with a special needs trust.
When your assets and money are in a trust, a trustee assumes total control over them. When government administrators perform an eligibility review, they will ignore the trust assets, as said assets technically belong to the trust and not the individual.
You can also use a special needs trust to keep inheritance funds or lawsuit winnings from going directly to the beneficiary. For instance, if your loved one inherits additional assets from another individual, those assets may disqualify him or her from receiving government aid. To ensure this does not happen, you can set up the special needs trust in such a way that it accepts both additional inheritances and court-mandated monetary awards.
Additionally, a special needs trust can protect your loved one’s assets from a judgment against him or her. If for whatever reason someone brings a lawsuit against your heir and wins, the plaintiff cannot touch the assets in the trust.
The purpose of this article is to inform you. It is not meant to serve as legal advice.