When planning for the future of a loved one with disabilities, two key options often come up: guardianship and special needs trusts. Both serve important roles – to protect your loved one’s well-being and financial security. However, they’re very different.
Understanding how these tools work can help you make the best decision for your family. Here’s what you need to know.
What is guardianship?
Guardianship is a legal relationship that gives someone the authority to make decisions for someone who cannot manage their affairs due to a disability or incapacity. This includes things to do with healthcare, finances, living arrangements and daily life.
While the court oversees the guardian’s actions to ensure accountability, such an arrangement can be restrictive. This is because the court-appointed guardian will have control over significant aspects of your loved one’s life, which may limit personal freedoms.
What is a special needs trust?
A special needs trust (SNT) is a legal tool designed to support someone with disabilities without jeopardizing their eligibility for government benefits like Medicaid or Supplemental Security Income (SSI). Unlike guardianship, you don’t require a court process to set up an SNT.
The trustee you appoint will manage the trust funds on behalf of your loved one, using the money to pay for things like medical bills, education, entertainment and other expenses government benefits don’t cover.
The beauty of an SNT is that it preserves your loved one’s independence. They can still make their own life choices while having the much-needed financial support. It’s also flexible and can be tailored to your loved one’s needs.
Which is right for your family?
The ideal choice depends on your loved one’s needs and abilities. If they require significant support in decision-making, guardianship might be necessary. However, if they can make their choices and you want to preserve their independence, an SNT could be the better option. Some families prefer both – guardianship for making decisions and a trust for financial security.
Seeking legal guidance can help you navigate such complex decisions and create a plan that works for your family. Remember, this isn’t just about the legalities involved; it’s about ensuring your loved one’s future is secure, happy and full of possibilities.
