If you have ever been the caregiver for a disabled person, you are familiar with what it takes to properly care for them. Comprehensive care includes not only medical care, but also personal needs. If that person receives assistance from need-based government programs, such as Medicaid or Supplemental Security Income, it becomes necessary to do what you can to protect their eligibility for those programs. Special needs planning is designed to address these issues so that care for the disabled can continue after the caregiver has died or become incapacitated.
What is a trust, generally?
A trust is a valuable estate planning tool that allows you to place money and other assets aside for a beneficiary, to be managed by a trustee. The person creating the trust chooses who will serve as the trustee, to hold and manage the funds, while being responsible for meeting the terms of the trust.
The purpose of a Special Needs Trust
The purpose of a Special Needs Trust is to provide future care for those who are disabled. Future planning is essential, just in case the caregiver becomes unable to continue providing care due to death or incapacity. The financial resources needed to continue proper care are placed in a Special Needs Trust so that they can be protected from lawsuits and creditors.
A Special Needs Trust can also protect these funds, so they are not counted as financial assets of the disabled. Otherwise, those funds may have an effect on eligibility for government benefits. For instance, the resource limit for an individual to be eligible for Medicaid is $2,000. Though certain assets, such as your residence, are not included as resources in determining eligibility, it is easy for your savings to be depleted rather quickly before Medicaid will begin paying for long-term care costs.
How is the term “special needs” defined?
The term “special needs” generally includes both medical and health care services, along with many other related services intended to increase the quality of life of the beneficiary. There are many options available, and they can be tailored to meet the needs of each beneficiary. A Special Needs Trust can also provide additional services, such as assistance with daily living activities and respite care for the primary caregiver. Establishing living arrangements or making necessary renovations to the beneficiary’s home may also be accomplished through the trust.
Types of Special Needs Trusts
There are basically two types of Special Needs Trusts: one for general support and one for supplement care. A General Support Special Needs Trust is usually considered the primary source of benefits for a disabled person. Whereas, a Supplemental Care Special Needs Trust is often the secondary source of benefits, which come into play after government benefits have been exhausted. Analyzing what type of Special Needs Trust would be right for your disabled loved one can be a complex decision.
Reno, Nevada Special Needs Planning Consultation
If you have questions regarding Special Needs Planning, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.