Estate planning is an act of love. The goal is to create a plan that provides for those we leave behind.

Many do not realize that leaving an inheritance to a loved one with a disability can potentially disqualify them from receiving government benefits. You need to plan appropriately.

Government benefits can generally be separated into two categories; entitlement (based on a recognized disability) and needs (based on income). Often, loved ones who qualify for benefits due to a disability, are unable to work, and can therefore also qualify for benefits based on income.

Income requirements to qualify for needs-based benefits are stringent. Leaving an inheritance directly to your disabled loved one can disqualify them from receiving the benefits they deserve.

Special needs trusts are vehicles that can shelter a disabled loved one’s inheritance, allowing them to qualify for benefits and utilize the money you leave them to supplement their quality of life.

Pros

• Preserve eligibility to government benefits like SSI and Medi-Cal

• Supplement your child's quality of life

• Leave money behind for:

  • Education

  • Vacation

  • Recreation

  • Vehicles

  • Home Goods

  • Out of pocket medical expenses

Cons

• Initial upfront cost

  • Slightly higher cost than non-special needs planning

• Administration

  • Special needs trusts have rules that must be followed in order for your disabled love one to continue to be eligible for benefits.