Louisiana families with a disabled member must plan for the future with care. The distribution of assets after your passing can significantly impact your loved one’s quality of life and their access to crucial services. To safeguard the well-being and stability of a loved one with disabilities, creating a detailed and thorough estate plan is critical. This plan should outline not only how assets are distributed but also include Special Needs Trusts, which can help preserve eligibility for government benefits while offering continuous financial assistance.
Things To Consider Before Creating an Estate Plan
Many parents often assume that securing their child’s financial future means directly leaving their assets to them. However, this simple approach may not always be the most responsible or effective option. For example, if a child lacks the skills to manage finances wisely, an outright distribution could result in poor financial decision-making and quickly deplete resources.
Additionally, this concern is especially relevant if any beneficiaries have or may develop special needs in the future. In such situations, direct inheritance could jeopardize their eligibility for government benefits or assistance, which are often determined by income and asset limits. Therefore, individuals should explore alternative strategies, such as establishing trusts or other financial structures.
How Can Setting Up a Special Needs Trust Help You?
The Special Needs Trust is a valuable financial tool that allows a parent, grandparent, or guardian to allocate funds for a child with special needs while preserving the child’s eligibility for critical government assistance programs.
How Does the Special Needs Trust Work?
Establishing this trust is a relatively straightforward process, but it is crucial to work closely with an experienced estate planning attorney to ensure that all legal requirements are met. As part of setting up the trust, you will designate one or more trustees who will be responsible for managing the assets placed in the trust. These trustees, who can be family members, close friends, or a professional fiduciary, will manage the funds to ensure they are used entirely for the benefit of your child. Should you experience a disability or pass away, the appointed trustees will take over the financial management of the trust, ensuring that your child’s needs continue to be met without interruption.
In addition, when you create a Special Needs Trust, you will prepare detailed written instructions that outline how the trustees should handle the funds. These instructions must be followed by law, giving you peace of mind that your child’s educational, housing, healthcare, and other essential needs will be adequately addressed.
The Advantages of a Special Needs Trust
A significant advantage of the Special Needs Trust is its ability to safeguard your child’s eligibility for federal, state, and nonprofit benefit programs, which are often necessary for support services. The trust accomplishes this by stipulating that the funds can only be used for purposes that do not conflict with the benefits provided by government assistance programs, such as Supplemental Security Income (SSI) or Medicaid. By carefully managing the use of trust assets, you can ensure your child receives the support they need without jeopardizing their access to these crucial resources.
Contact Losavio & DeJean Today To Learn More About Special Needs Trusts
While discussing estate planning topics can be uncomfortable, all parents need to prioritize the well-being of their children in all situations. This responsibility becomes even more pressing for parents of children with special needs, who face unique challenges and complexities.
To learn more about Special Needs Trusts and what they can mean for your family, contact Losavio & DeJean today to review your questions and concerns.