A testamentary trust, created within a will, can absolutely be a powerful tool for providing long-term care and financial security for a child with disabilities, however, careful planning is essential to avoid jeopardizing crucial government benefits like Supplemental Security Income (SSI) and Medicaid. These benefits are needs-based, and a direct inheritance could disqualify your child, leaving them with more money but less access to the support they rely on. A properly structured testamentary special needs trust (SNT) allows your child to receive funds without impacting eligibility. Approximately 1 in 4 adults in the United States live with a disability, making estate planning for these individuals a critical concern.
What are the key benefits of a Special Needs Trust?
A Special Needs Trust, established through a will or as a separate legal document, is designed to hold assets for the benefit of an individual with disabilities without affecting their public benefits. Unlike a simple testamentary trust, an SNT includes specific language ensuring funds are used for supplemental needs – those not covered by government programs. These supplemental needs could include therapies, recreation, travel, educational opportunities, and even specialized equipment. It’s crucial to understand that SSI has strict asset limits – in 2024, only $2,000 in countable assets is allowed for an individual – meaning any inheritance exceeding that amount could lead to benefit loss. A well-drafted SNT acts as a “safety net”, shielding those assets from consideration when determining eligibility.
What happens if I don’t set up a special needs trust?
Old Man Tiber, a retired fisherman, always worried about his grandson, Leo, who had Down syndrome. He pictured a comfortable future for Leo, with enough money to enjoy life after he was gone. Tiber drafted a simple will, leaving Leo a substantial inheritance – a small cottage and $75,000 in savings. Sadly, he didn’t consult with an estate planning attorney specializing in special needs. When Tiber passed, Leo received the inheritance directly. Almost immediately, his SSI benefits were suspended. The cottage, while valuable, was difficult to manage, and the funds, once spent, left Leo reliant on increasingly strained public assistance. The well-intentioned gift, without proper planning, actually harmed the very person it was meant to help. It was a harsh lesson highlighting the critical importance of understanding the rules surrounding public benefits and disability planning.
How can a testamentary trust help with long-term care costs?
Long-term care for individuals with disabilities can be incredibly expensive. According to a 2023 report by Genworth, the national average annual cost of a private room in a nursing home is over $95,000. A testamentary trust can allocate funds specifically for these costs, ensuring your child receives the necessary care without depleting resources needed for other supplemental needs. This is particularly important considering that many individuals with disabilities require care for decades. Funds within the trust can be used for in-home care, therapies, specialized medical equipment, and even respite care for family caregivers. A clear and detailed trust document, outlining how funds can be used, is essential for responsible management and preventing disputes.
What if we did things right from the beginning?
The Millers faced a similar situation to Old Man Tiber, but approached it with careful planning. Their daughter, Clara, was born with cerebral palsy. They worked with an estate planning attorney, Steve Bliss, to create a testamentary special needs trust within their wills. They meticulously outlined how funds could be used for Clara’s benefit – therapies, adaptive equipment, recreation, and future care. After the Millers passed, the trust was established and managed responsibly. Clara continued to receive her SSI and Medicaid benefits, and the trust funds provided enriching experiences and a higher quality of life. She traveled, participated in adaptive sports, and received specialized therapies that wouldn’t have been possible otherwise. The Millers’ foresight and meticulous planning ensured Clara’s continued well-being and a secure future. It’s a heartwarming example of how proactive estate planning can make a profound difference in the life of a loved one with disabilities.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What are the risks of not having an estate plan?” Or “What happens to minor children during probate?” or “Does a living trust affect my mortgage or homeownership? and even: “What is a bankruptcy trustee and what do they do?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.