How can I protect the inheritance of a child or other beneficiary of mine who is, or will be, receiving government benefits due to their special needs?
If you have a beneficiary who is disabled, you may want to consider setting up a special needs trust as part of your estate plan. A special needs trust allows you to leave funds for the benefit of a disabled person while also enabling the special needs beneficiary to continue to receive their means-tested government benefits.
This trust specifically does not allow for distributions of cash, or paying for the special needs beneficiary's food, shelter, or other essentials that the government benefits are covering. SNT is designed to supplement rather than supplant what the government provides to the special needs beneficiary. “Supplemental needs” refers to the basic requirements for maintaining good health, safety, and welfare, when, at the discretion of the trustee, those basic requirements are not being provided by any public agency, office, or department of any state or the United States.
“Supplemental needs” also includes medical and dental expenses; toilet articles and grooming aids; annual independent checkups; clothing and equipment; programs of training, education, treatment, and rehabilitation; private residential care; transportation, including vehicle purchases; maintenance; insurance; and essential dietary needs.
“Supplemental needs” may include clothing; electronic and computer equipment; vacations; reasonable travel and related expenses of relatives and friends of the beneficiary for the purposes of making periodic visits to the beneficiary; athletic contests; movies; trips; and money to purchase appropriate gifts for relatives and friends.
When you establish the special needs trust, you will designate a trustee who will be required to follow the terms of the special needs trust as they make distributions from the trust for the special needs beneficiary. MyAdvocate generates Third-Party Special Need Trusts.