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Yorkville Special Needs Estate Planning Lawyer: How Does Special Needs Estate Planning Help Families with a Disabled Family Member

 Posted on December 13, 2022 in Estate Planning

yorkville estate planning lawyerSpecial needs estate planning is a type of legal planning that focuses on providing for the future care and support of individuals with disabilities. This type of planning is important because it helps ensure that the individual with special needs will be taken care of and have access to the resources, they need to live a comfortable and fulfilling life.

Key Elements of Special Needs Planning is Creating a Special Needs Trust

One of the key elements of special needs estate planning is the creation of a special needs trust. This is a legal document that allows parents or other loved ones to set aside money or other assets for the benefit of the individual with special needs, without affecting their eligibility for government benefits such as Medicaid or Supplement Security Income (SSI). The Trust is managed by a trustee who is responsible for using the funds in the trust to pay for the individual’s care and support.

In addition to a special needs trust, special needs estate planning involves other legal instruments such as the following:

  • Living Trust

  • Pour Over Will

  • Power of Attorney for Property

  • Power of Attorney for Medical Decisions

  • Quit Claim Deed in Trust

These other legal documents are coupled with the Special Needs Trust. Either the Special Needs Trust can be established upon one’s death or during one’s lifetime. Often, a Third-Party Special Needs Trust is beneficial during one’s lifetime. The benefit of establishing the Trust during one’s lifetime is the ability of family members to designate gifts and inheritances in the Trust’s name for the benefit of the individual with the disability and need for funding to support their independence and care.

Summary of the Benefits of a Revocable Living Trust

A revocable living trust is a type of trust that allows the person creating the trust (the grantor) to retain control over the assets placed in the trust. This means that the grantor can make changes to the trust or even revoke it altogether. The main advantage of a revocable living trust is that it can avoid the time and expense of probate, a legal process that is required when a person dies and leaves behind assets that need to be distributed according to their will. Because the assets in the revocable living trust are managed by the trustee, rather than going through probate, they can be distributed according to their wishes through their revocable living trust. 

A third-party special needs trust can be set up and funded upon one's death, which is designed to maintain the disabled family member's eligibility for Medicaid and SSI. The Third-Party Special Needs Trust may not go directly to the disabled individual or otherwise, the assets will be considered when maintaining one's eligibility for Medicaid and SSI. 

The major advantage of the revocable living trust is the seamless distribution of one's assets upon death. A properly funded and titled living trust provides peace of mind at one's death because the administration process is simple and smooth. There is no government intrusion or involvement because the court process called probate is unnecessary. On the contrary, estate planning through a will must undergo a supervised court process called "probate".

Third-Party Special Needs Trust in Yorkville and Kendall County, Illinois

The purpose of a third-party special needs trust is to supplement, not replace, the benefits provided by government programs such as Medicaid and Supplemental Security Income (SSI). These programs often involve strict guidelines and eligibility requirements, which require careful estate planning to maintain these government benefits and program eligibility.

A third-party special needs trust allows an individual with a disability to save and accumulate assets. A third-party special needs trust allows the individual with a disability to access additional funds for items and services that are not covered by government programs. A third-party special needs trust may also be called a "supplement special needs trust" because it is designed to supplement not replace the government benefits. 

The government benefits are "needs" based, which mean that disabled individual is often on SSI because of their lack of financial assets and inability to work the necessary periods to qualify them for social security disability income. The major difference between social security disability income is the individual who is disabled worked enough years and paid into the insurance program to qualify for government-based benefits, which is not needs-based. On the contrary, SSI is a needs-based program, in which one must regularly qualify for the benefits.

One of the benefits of a Third-Party Special Needs Trust is maintaining the eligibility for government programs

One of the key advantages of a third-party special needs trust is that it allows the individual with a disability to maintain eligibility for government benefits. Because the trust is funded with assets of a third-party such as a parent, grandparent, or sibling, the individual with a disability does not technically own the trust assets. This means that the trust assets are not counted when determining eligibility for government benefits.

Another advantage of a third-party special needs trust is that it allows the individual with a disability to have more control over how the trust assets are used. Unlike a first-party special needs trust, which is funded with the individual's assets, the individual with a disability does not have the legal right to withdraw funds from a third-party special needs trust. Instead, the trust assets are managed by a trustee, who has a legal obligation to use the trust assets for the benefit of the individual with a disability. This can provide peace of mind to the individual and the third party who can be assured of the financial and emotional security of the individual with a disability. One of the goals of special needs estate planning is to allow the individual with a disability to maintain their financial and independent life.  

Oswego Special Needs Trust Lawyer to Provide Independent for Disabled Individuals Who Have Special Needs

Peace of Mind Asset Protection, LLC provides peace of mind and asset protection benefits for disabled individuals and their families. Estate planning is a complex area of law, which requires experience working with special needs families and expertise in trust planning. Call a Kendall County Special Needs Lawyer today at 630-882-2467 or fill out the online contact form.

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