Using a special needs trust to provide for a sick relative

On Behalf of | Dec 22, 2020 | Estate Planning | 0 comments

Even though modern medicine offers many ways to treat disease, some medical conditions are both chronic and progressive. If your loved one has Alzheimer’s disease, ALS, diabetes or any other serious ailment, he or she may not be able either to work or to support himself or herself financially.

The social safety net includes financial assistance for many sick individuals who have limited financial resources. If your relative already qualifies for Supplemental Security Income, Medicaid or other means-tested public benefits, giving a cash gift may make him or her ineligible for government help.

A special needs trust may be an effective workaround

To retain eligibility for certain government benefits, your relative must have scarce financial resources. As part of your overall estate plan, a special needs trust holds funds for the benefit of your ailing loved one.

That is, rather than transferring ownership of assets to your relative, the trust simply pays for his or her supplemental expenses.

A special needs trustee helps you and your loved one

You want the special needs trust you establish to be effective. When you set up the trust, you choose a competent trustee to oversee it. This person is responsible for compliance, reporting, recordkeeping and investing.

More importantly, the special needs trustee may also be an advocate for your ill loved one. If your relative is having trouble accessing necessary services, the trustee may help connect him or her with the appropriate health care professionals.