How to Leave Money to a Child or Beneficiary with Special Needs Without Affecting Their Government Benefits
If you have a child or other loved one with a disability or special needs, estate planning requires extra care. Many families worry about how to provide financial support without interfering with critical government benefits like Supplemental Security Income (SSI) or Medicaid. These programs often have strict income and asset limits, which can make it tricky to leave an inheritance or financial gift without causing unintended consequences.
Thankfully, there is a solution designed specifically for this situation: the Supplemental Needs Trust, also commonly referred to as a Special Needs Trust.
What is a Supplemental or Special Needs Trust?
A supplemental needs trust is a specialized type of trust that allows you to set aside money or assets for a person with special needs without disqualifying them from government assistance. Instead of giving the money directly to the individual, which could put their benefits at risk, the funds are held in trust and managed by a trustee—a person or institution responsible for using the money on the beneficiary’s behalf.
How It Works
The key feature of a special needs trust is that it is meant to supplement, not replace, the support the beneficiary receives from public programs. For example, trust funds might be used to pay for things like transportation, education, out-of-pocket medical expenses, recreation, or personal care attendants—items and services that enhance the individual’s quality of life but aren’t covered by government benefits.
As long as the trust is drafted properly and complies with applicable laws, the assets in the trust are not counted against the beneficiary’s eligibility for need-based government programs.
Planning Ahead
If you have a beneficiary with special needs, it is essential to work with an attorney who understands the specific rules and requirements for creating a valid supplemental needs trust. These trusts are usually created to last for the beneficiary’s lifetime and need clear instructions that align with state and federal guidelines.
Proper planning ensures your loved one is cared for financially, emotionally, and physically—without risking the benefits they depend on.
Ready to Protect Your Loved One’s Future?
I help families create thoughtful, legally sound plans that provide for their children without jeopardizing essential support. If you have questions about special needs trusts, I can help you design a plan that fits your family’s needs and goals. Or, if you would like me to review or create a trust for you, then click the link below to schedule a call with me today - I’m always happy to help!
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