What Are the Benefits of a Special Needs Trust?
One of the benefits of planning your estate early is that you have time to review the full suite of options available to you. While standard revocable and irrevocable trusts may be an excellent option for most people, they aren’t always suitable. By working with an estate planning attorney, you can determine what planning tools are the right choice for you.
Parents and close family members of special needs individuals often utilize special needs trusts in their estate planning. Learn more about this and other estate planning options by calling Entz Burton & Associates at 405-773-9800.
Why Standard Trust Options Aren’t Ideal in These Situations
Revocable and irrevocable trusts are two of the most common options used in estate planning. In both cases, assets pass directly to designated beneficiaries upon the trust creator’s death. Some choose a more structured type of trust that gives beneficiaries set amounts at different milestones in life, rather than giving them everything at once.
However, these options are not ideal for a beneficiary with special needs. If an individual relies on public aid programs like Medicaid, SoonerCare, and SSI, they are generally bound by strict income limits. An influx of cash or other valuable assets will generally put them over the limit for many aid programs, resulting in them immediately losing coverage. With the costs of healthcare, housing, and other necessities being what they are, losing these benefits is not an option.
A special needs trust seeks to avoid this problem by ensuring that a beneficiary is not in possession of assets in such a way that their benefits would be at risk.
How Special Needs Trusts Work
A special needs trust is created to help a beneficiary with special needs. The trustee of the special needs trust ensures the funds are used appropriately to help the beneficiary without putting their government benefits at risk. Because of this, the role of trustee is very important.
The goal of a special needs trust is not to replace the benefits the beneficiary receives. Instead, it is to supplement the benefits they receive by improving their quality of life. Trust assets may be used to pay for certain needs not covered by Medicaid.
Special Needs Trusts May Offer Peace of Mind
Parents of special needs children often struggle knowing that they will pass before their child. A special needs trust is one way for parents to ensure their child has the best quality of life possible. If the child is used to a certain standard of living, a special needs trust allows them to maintain that standard of living and stick to the routines they’ve come to enjoy.
What the Law Says About Special Needs Trusts
Oklahoma law does address trusts for individuals who receive or apply for SoonerCare. If the funds are considered available to the individual, the funds do count against them for SoonerCare benefits. Assets are considered available if the individual or their spouse has direct control of them and disbursement is at their sole discretion. If a beneficiary has control of and access to the funds at will, it’s likely that the money would count against them when applying for public benefits.
This highlights the need for an estate planning attorney with experience in special needs trusts. It’s possible for a well-intentioned trustee to put their loved one’s benefits at risk and upend the medical care and benefits they depend on. With the help of an estate planning lawyer, the creator of a special needs trust can protect their loved one’s benefits and choose a trustee who is capable of taking on this significant responsibility.
Discuss Your Estate Planning Needs With Entz Burton & Associates
The assets you have worked so hard to build are important to you—make sure they are handled appropriately after you pass. At Entz Burton & Associates, we are committed to helping clients create an estate plan that honors their legacy. Schedule a consultation now by calling us at 405-773-9800 or connecting with us online.
Attorney J. Michael Entz at Entz Burton & Associates is an experience lawyer in estate planning law, business formation and asset protection serving the families in Oklahoma City and Weatherford office.
