So you have a loved one with special needs? More likely than not, this individual’s lifetime need for financial assistance will be greater than your loved ones who do not have special needs. Perhaps you would like to leave some sort of inheritance to your loved one with special needs, but you’re worried that the inheritance will reduce or eliminate a government benefit your loved one is already receiving. Faced with this situation, many individuals decide to leave that inheritance to a trusted family member or friend of their loved one with special needs, trusting that the individual who receives the inheritance will use the inheritance for the benefit of their loved one with special needs.
There are several reasons, however, why doing so is undesirable. First and foremost, perhaps the trusted family member or friend is not as trustworthy as you believe and ends up using the inheritance for their own spendthrift ways after you are gone. Hopefully that is not the case. However, even the best-meaning individual can become faced with tough financial circumstances that would tempt them to use the money for their own needs, such as being late on home mortgage or credit card payments. Worse still, what if the trusted family member goes through a divorce or gets in an automobile accident and is found liable for a large sum of damages? Any of these situations would expose the inheritance to creditors of the trusted family member, even though they are supposed to hold that money for the benefit of your loved one with special needs.
Instead of allowing any of the above circumstances to affect the inheritance your loved one with special needs receives, consider incorporating Special Needs Trust Planning into your estate plan. By leaving the inheritance of your loved one with special needs in a properly drafted Special Needs Trust (“SNT”), the inheritance will be kept safe and available to pay for expenses that are not already covered by any government benefits your loved one is receiving, thereby enabling your loved one to remain eligible for those benefits. When deciding whether such an estate planning vehicle is right for you and your loved one with special needs, make sure you speak to an attorney who is experienced in special needs planning and also knowledgeable of the various government benefits programs that may be available for your loved one with special needs.
By leaving an inheritance to a trusted family member or friend, you invite unforeseeable life circumstances of others to potentially negatively affect monies you intend to be used to support your loved one with special needs. Instead, leave that inheritance to your loved one in a Special Needs Trust and enjoy the peace of mind knowing that the inheritance will be available for your loved one when needed to further enhance their quality of life.