People in East Hanover have so many choices when it comes to estate planning and elder care, that it can be difficult to know where to start. Sometimes a person creates a will, and believes their estate planning is done. This can be problematic if the person also wants to rely on Medicaid, Supplemental Security Income or other government benefits as they age. In order to qualify for these benefits, a person’s assets cannot exceed a certain threshold, and that threshold is fairly low. If a person’s assets exceed the threshold, they will be ineligible for benefits.
It may seem like a person has to nearly totally deplete their assets to qualify for benefits, but that does not have to be the case. Instead, a person can set up a special needs trust. The assets placed in a special needs trust are in the complete control and management of the trustee, not the beneficiary. Therefore, when pursuing government benefits, the assets in the special needs trust will not be counted, as the beneficiary is not the one in control of them.
Another benefit of a special needs trust is that if a person receives a settlement or award from a lawsuit, those assets can be funneled into the trust, and won’t be included when determining the person’s eligibility for government benefits. Similarly, if the person is the subject of a lawsuit, the assets in the special needs trust cannot be taken should he or she lose the lawsuit.
Special needs trusts are a specific estate planning instrument. They can be relatively complex, depending on a person’s health and financial circumstances. They can be part of a well-rounded estate plan that includes qualifying for government benefits, but they must be properly executed in order to achieve that goal. Therefore, it is advisable that those interested in executing a special needs trust do the research and seek the help necessary to ensure that the final document is legally sound and meets their long-term care planning wishes.