Disability Planning

Americans are living longer than ever before and this fact only emphasizes the importance of planning for those living with disabilities. Many disabled adults receive some form of government benefits, such as Social Security benefits, Supplementary Security Income (SSI) or Medicaid benefits. What happens if a family member wants to leave that disabled person an inheritance? What happens if the disabled person comes into some money, such as proceeds from a lawsuit, or a lump sum payment from Social Security?

The law entitles disabled individuals to keep such monies in a special trust called a Supplemental Needs Trust. This is a special type of trust designed only for disabled people to provide extra things that are not paid for by government programs. A Supplemental Needs Trust may maintain for the disabled person an unlimited amount of money without effecting, eliminating or reducing their government benefits.

Planning for a disabled child requires equally careful consideration. Who will care for your son or daughter when you are gone? Where and how will he or she live? Any assets left to a disable child upon the death of a parent should be left in a Supplemental Needs Trust. Parents should consider purchasing life insurance to fund a Supplemental Needs Trust, as either a primary or secondary source.

There are various options available to care for a disabled adult or child, but proper planning is the key to accomplishing your objectives.