March 2, 2019 Legal News

The importance of estate planning when you desire to provide for a disabled loved one after your death

Whether it be your child, your sibling, your best friend, or any other disabled individual, if you want to leave some or all of your assets to a disabled individual to ensure they are cared for after your passing and they are receiving benefits of any kind, there are some things you need to know.

If planning is not done, or done properly, the individual you are trying to provide for risks losing some or all of the benefits they may be receiving. While you may have the best of intentions, leaving any assets or funds directly to the individual can create a host of problems, such as disqualification of services, programs, and benefits, such as healthcare, housing, and social security, to name a few.

While you may know that many of the services and programs your loved one is involved with are income and asset eligible, often times individuals do not stop to think that if they provide for the individual in their last will and testament, or name a disabled individual as a beneficiary of any accounts, it can do much more harm than good.

This of course does not mean that you should not provide for the disabled individual, it just means you want to plan ahead, to make sure your estate planning documents are set up properly.

Oftentimes when a disabled individual receives an inheritance, it is not enough for the disabled individual to privatel pay for all the services they are receiving, however it is too much of an inheritance for them to continue to qualify for services and benefits.

There are several ways to go about providing for the disabled individual and ensuring that they still get their benefits. A Special Needs Trust can be created. This allows the individual to still receive services yet have a special needs trust or supplemental Needs Trust as they are sometimes called, to provide for things that they need in addition to what they are receiving.  So instead of leaving funds directly to the individual you can bequest funds to the Special Needs Trust, or make a Special Needs Trust the beneficiary on an account.  Another option is for the disabled individual to have a 529a account. The ABLE Act provides for disabled individuals to have an account to save for future needs. It is similar to a 529 College account for typical individuals.

This office was recently contacted by a Foxboro resident who reached out to us because her ex-husband passed away and left their disabled daughter half of all of his assets and she individually was the co-beneficiary of his Thrift Savings Plan and pension.  The disabled child is in a residential facility and receives many different benefits from the state and other agencies. As referenced above, this is a case where the individual was not left enough money to private pay for the rest of her life but was left enough to disqualify her from many programs. In addition, half of the estate property is due to be inherited by her as well. This has caused a lot of problems, even though dad had the best of intentions to provide for his child. There are still options, such as a self-settled Special Needs Trust, where the individual themselves, create Trust, but the situation is certainly less than ideal, it has caused the mother and family a great amount of stress, time, and money, to address their daughter’s inheritance…all of which could have been avoided with proper planning.

We cannot stress enough the importance of planning ahead when preparing to provide for disabled individual after your passing. It will save a great amount of time, effort, and expense and in addition, it will give you the peace of mind to know your disabled loved one will be provided for just as you had intended.