Yorkville Special Needs Trusts Attorneys

Lawyers Helping Establish Trusts to Provide for the Needs of Loved Ones With Disabilities in Yorkville, IL

Parents, grandparents, or other family members may want to leave an inheritance for a loved one with a disability or provide other forms of assistance. However, doing so without careful planning can create serious unintended consequences. Many people do not realize that when a person receives money or property directly, this could disqualify them from receiving the government benefits they depend on.

At Gateville Law Firm, our attorneys help families in Yorkville, throughout Kendall County, and in other nearby communities establish special needs trusts that will provide financial support for loved ones without putting essential benefits at risk. These trusts can be used to hold assets for the benefit of a disabled person while making sure they will qualify for financial assistance provided through government programs. Understanding how these trusts work, and why they are so important, can help families avoid costly mistakes during the estate planning process.

The Risks of Leaving an Inheritance Directly to a Person With a Disability

People with disabilities may rely on government benefits programs. Medicaid may provide healthcare coverage, ensuring that they can receive the proper medical care. Supplemental Security Income (SSI), a program provided through Social Security, can provide a person with ongoing income when they are unable to maintain full-time employment. These programs are means-tested, and eligibility will depend on a person having limited income and resources. To qualify for SSI, a person generally cannot own more than a small amount of countable assets, often as little as $2,000.

If a person with a disability receives an inheritance directly through a will or a beneficiary designation, or if they receive a gift such as a large amount of cash or a home, the assets they receive will affect their eligibility for benefits. They could be disqualified from receiving benefits until the assets have been spent down to acceptable levels. For a person who depends on these benefits for housing, medical care, or basic living expenses, losing eligibility can lead to serious hardship.

At the same time, a disabled person who receives an inheritance or is gifted assets may be vulnerable to financial exploitation or mismanagement. If a person may be unable to manage significant assets on their own, they could be at risk of significant financial losses that could affect their overall well-being.

How a Special Needs Trust Can Preserve Eligibility for Government Benefits

A special needs trust, which may also be called a supplemental needs trust, can hold assets on behalf of a person who has a disability or other special needs, preventing those assets from being considered when determining eligibility for SSI or Medicaid. The beneficiary will not have direct control over the assets in a trust, which will ensure that they can continue receiving essential public assistance while also having access to additional financial support. Distributions from the trust will be structured to supplement rather than replace government benefits, providing assistance with issues that go beyond basic necessities.

There are generally two main types of special needs trusts. A third-party special needs trust may be funded with assets belonging to someone other than the person with a disability. For example, a parent or grandparent may establish a supplemental needs trust as part of their estate plan, ensuring that the assets in the trust will be used for approved purposes.

A first-party special needs trust may be funded with assets that belong to the disabled person. For example, a person may receive funds through a personal injury settlement. They can establish a trust to remove these funds from their control, ensuring that they will be able to maintain eligibility for government benefits. A first-party trust may include a requirement that any remaining funds will be used to reimburse Medicaid after the beneficiary's death.

How a Special Needs Trust Can Be Used

A special needs trust can pay for expenses that supplement, rather than replace, the support a person receives through government benefits. Trusts must be structured carefully to avoid interfering with a person's eligibility for benefits. A trustee will generally make payments directly to service providers rather than giving cash to the beneficiary. The assets in trusts may be used for purposes such as:

• Medical treatment or dental care not covered by Medicaid or other insurance
• Mental health therapy, personal care attendants, and other supportive services
• Education, tutoring, and job training programs
• Transportation, including providing a person with a vehicle or making arrangements for other forms of transportation
• Recreation, entertainment, and vacations
• Home modifications and specialized equipment
• Personal items like clothing, electronics, and furniture

The funds in special needs trusts can cover expenses that improve a beneficiary's quality of life beyond what government benefits provide. A family can take steps to enhance a loved one's quality of life without jeopardizing the essential benefits they need.

Establishing and Managing a Special Needs Trust

A special needs trust will need to be carefully drafted to make sure it complies with the specific rules governing government benefit programs. Our attorneys work with families to create trust documents that clearly define how distributions may be made, name an appropriate trustee to manage a trust responsibly, make sure a trust is properly funded, and coordinate a trust with the family's broader estate plan.

Choosing the right trustee is an important part of this process. A trustee must understand the rules governing distributions, and they will need to manage the trust carefully over a period of many years. In some cases, a family may choose a trusted family member to serve as trustee, while others may use a professional trustee.

Frequently Asked Questions About Special Needs Trusts

Contact Our Yorkville, Illinois Special Needs Trust Lawyers

With special needs trusts, families can provide financial support to ensure that loved ones with disabilities will be able to maintain a good quality of life. At Gateville Law Firm, we can make sure these trusts will be established and funded correctly and incorporated into a family's overall estate plan. Contact our Yorkville special needs trusts attorneys at 630-780-1034 to take steps to protect a loved one's financial interests.