Keeping Your Beneficiary Eligible for Government Benefits

Posted by on Feb 2, 2015 in Estates, Family | 0 comments

Providing well for one’s beneficiaries, (children, particularly), is a major concern of every good parent. This concern increases if the beneficiary, a loved one that is, were suffering from a disability, which may be physical, intellectual or psychiatric. If these injuries were caused by another’s actions, they may be able to file a personal injury claim to help ease the financial burden as well.

Leaving money and/or property to a disabled beneficiary, however, needs very careful planning as miscalculated actions may only result to removal of government health care and financial benefits, such as nursing care from the Medicaid welfare program and the Supplemental Security Income (SSI), for your loved one. While leaving behind a house or even a car to your disabled child will not affect his/her eligibility to receive and enjoy Medicaid and SSI, leaving him/her cash, like a savings account, is a completely different story.

Though disability may render your child wanting of all the possible government assistance and benefits available, the cash that you will leave behind may have the effect that he or she is already safely covered. This presumption, though, can definitely be avoided to keep your child from being deprived of the benefits which may be rightfully his/hers. Through the drafting of a supplemental needs trusts, more commonly known as special needs trust, can this be possibly avoided.

The special needs trust is a means whereby parents or custodians can provide benefits for, and protect the assets of, their disabled beneficiary; it is recognized and allowed both by the state and the federal government. To keep your beneficiary’s eligibility to government benefits and assistance, the trust requires that all properties and cash intended for his/her future support be left under the special needs trust itself instead of being placed under his/her name directly. Though the trust will end eventually, upon the death of the beneficiary or when all the money have already been spent (by the beneficiary or in his/her behalf) it will never have any negative effect on his/her eligibility.

The person who will draft the trust also has the legal right to appoint whoever he/she wants to act as trustee, that is, the person who shall manage the property and the cash in behalf of the beneficiary. This legal right is partly meant to eliminate any possibility of issues of mismanaged trusts which explains is one of the many issues surrounding a trust and the usual basis of trust litigation.

The website of Peck Ritchey, LLC, mentions the different legal problems that can exist between the beneficiary and the trustee regarding the trust’s proper management – problems that often require the court to settle. In the event of legal issues regarding special needs trusts, seeking the services of a well-trained lawyer will definitely be among the best interests of the beneficiary.

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