Many individuals who are disabled, whether born with a disability or disabled at some point during their lifetime, will apply for and be deemed eligible to receive certain government benefits. Such benefits may include Social Security Disability Income (S.S.D.I.), Supplemental Social Security Income (S.S.I.), Medicare and Medicaid. Some of these benefits are paid to the disabled individual regardless of how much income the disabled person may be receiving or assets the disabled person has in his name. Other benefits are contingent upon the disabled individual’s receipt of financial holdings.
Many disabled individuals (and their parents and families) are not aware that receipt of certain government benefits paid due to their disability may be impacted based on the disabled person’s receipt of an inheritance. For this reason alone, it is very important for any person looking to designate a disabled person as a beneficiary under an estate plan to understand the importance of having an appropriate estate plan established so as to not impact continued receipt of government benefits by the disabled individual.
Typically, the individuals who most likely need to be aware of these regulations are the parents and grandparents of the disabled individual. In most instances, the recommendation to the parents or grandparents will include the establishment of a “Special Needs Trust (S.N.T.)” in the parent or grandparent’s estate plan so as to preserve and not disrupt the disabled beneficiary’s continuing entitlement to benefits.
A S.N.T. is designed to hold assets intended for a disabled individual. A Trustee is named in the estate plan to manage and distribute the S.N.T. assets to or for the benefit of the disabled trust beneficiary. A S.N.T. must contain specific language and provisions in order for the assets held in the S.N.T. not to impact a disabled individual’s receipt of government benefits.
Individuals looking to benefit a disabled person under an estate plan should confirm that the estate planning lawyer they hire has a clear understanding of the applicable laws. The lawyers at Poole Brooke Plumlee PC have a solid foundation in S.N.T. planning in the overall context of estate planning and are well positioned to assist clients with their overall estate planning.