Why Special Needs Loved Ones Require Specialized Considerations In An Estate Plan

If you have a child, grandchild, or other close loved one with special needs, there are some unique estate planning considerations that you need to be aware of. Leaving money or property directly to a special needs loved one could undermine their eligibility for public benefits. The good news is that there are estate planning solutions available. Here, our Boston special needs planning attorney explains what you should know if you have a loved one with special needs.

The Challenge: Direct Transfers Can Make a Person Ineligible for Public Benefits 

It is important to understand the challenges that special needs people (and their families) face in Massachusetts. Many people with disabilities rely on public programs such as Supplemental Security Income (SSI) and Medicaid. These programs are means-tested. There are strict income limits and asset limits. Why does this matter? A direct inheritance by a special needs person may exceed the threshold. That matters because it could cause loss of benefits.

A Special Needs Trust Can Help You Solve the Problem

A special needs trust or SNT is a specialized estate planning tool that is designed specifically to help people with disabilities. The Legal Information Institute explains that a special needs trust is a “legal trust created to provide funds to recipients of Supplemental Security Income (SSI) or Medicare without counting towards the income caps for either welfare program.” 

In other words, a special needs trust allows parents or relatives to provide for supplemental expenses beyond what government benefits cover. The funds may be used for education, therapy, transportation, or a wide range of different quality of life improvements. A special needs trust is managed by a trustee, who is tasked with, among other things, ensuring that distributions comply with both federal regulations and state rules.

Note: Massachusetts law recognizes both first-party (self-settled) and third-party special needs trusts. With either type of special needs trust, careful drafting of the trust documents is a must.

There are Other Estate Planning Options for Special Needs Planning in Massachusetts 

While special needs trusts are the primary estate planning tool, there are also other strategies that may supplement planning. One big example is ABLE accounts. Massachusetts allows for ABLE accounts. These accounts can be used to let qualified individuals hold limited funds in tax-advantaged accounts without losing benefits. With that being said, annual contribution caps apply. A comprehensive estate plan integrates trusts, powers of attorney, and care directives tailored to the beneficiary’s unique needs. Our Boston special needs planning attorney can help. 

Consult With Our Boston, MA Special Needs Planning Lawyer Today

At Fisher Law LLC, our Massachusetts estate planning attorney has extensive experience with special needs planning. If you have questions or concerns about special needs trusts or estate planning more generally, please do not hesitate to contact us for a completely confidential initial consultation. We provide estate planning services throughout all of the Greater Boston area.