There are a number of reasons why estate planning for people with special needs can be different than planning for people who do not have special needs. Understanding these reasons will help you during the initial planning process and beyond. You should think of these reasons every time you make a change to the estate plan or plan a gift to someone with special needs.
- Any sudden increase in income or assets can jeopardize benefit eligibility
Government benefits such as SSI or Medicaid are “means tested”, meaning eligibility and benefit amount will be lowered if you have outside income. Receiving payouts from a trust, an inheritance from a relative, or a personal injury settlement could jeopardize those benefits for a special needs person in need of the benefits to get medical care or pay for daily expenses.
- Benefiting other family members when using a special needs trust is tricky
If you are a special needs person who wants to pass on inheritances to other family members after your death and you have a self-settled special needs trust, your family members will not necessarily receive any money left in the trust on your death. First, you must pay back Medicaid for the amount of benefits it paid out to you. Any money left over in the trust can be left to relatives. If you have a pooled trust, your estate may need to pay the trustee in addition to Medicaid.
- You should consider more than just inheritances
Special needs estate plans should take into account housing, funding, medical care, power of attorney, guardianships, benefits eligibility, and much more beyond inheritances. Yes, these often are aspects of estate plans, but for a person with particular caretaking, health, or financial needs they can be crucial to thriving. Remember to consider all family members’ estate plans, including siblings and more distant relatives who may want to pass on inheritances, insurance proceeds, or pensions to younger relatives.
- Make sure you have a plan for any “gaps”
You should consider the possibility of a “gap” in care or funds for a special needs person if his caretaker suddenly passes away or becomes incapacitated. It may take some time for an estate to go through probate or otherwise be administered. Figure out who can be an emergency caretaker while estates are sorted out and alternative care or funding can begin. You may want to draft or have ready a letter of intent or statement of wishes to bridge the gap.
- Every person with special needs is unique
Different people with different special needs should have different estate plans that address their specific needs and plan for their futures. No estate plan is one size fits all.
Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@rubinlaw.com or call 866-TO-RUBIN.
