Using a Special Needs Trust to Preserve Government Benefits

Parents of children with special needs who receive government benefits have additional concerns when creating their estate plans. While providing for their children after they are gone is of primary concern, an equal concern is to preserve the child’s ability to receive government benefits. Parents must be careful not to leave assets to disabled children that the government can consider for  purposes of calculating benefit eligibility.

Fortunately, a carefully crafted estate plan, which includes a special needs trust, can provide for a disabled child without interfering with government benefits.

How a Special Needs Trust Works

  • Children do not have an inherent right to inherit from their parents under their will or trust.
  • California law permits a parent to leave assets to a child, while placing restrictions upon the inheritance.
  • A child must abide by the restrictions placed on his ability to access his inheritance.
  • In general, if a child does not have an absolute right to demand funds from an estate or trust, government benefits are not affected. The funds are not deemed “available” to the child—therefore, the benefits he qualifies for cannot be reduced.

Along with a thorough estate plan, a special needs trust can be a valuable tool for families with disabled children. Contact us any time to schedule a consultation to discuss whether a special needs trust may be right for you. Also, if you found this article helpful, click the like button to share it with your friends on Facebook.

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