As a parent, you want what’s best for your children. Part of caring for your loved ones means preparing for when you are gone. Estate planning is essential to make sure that your family and dependents are taken care of when you have passed away. A Will helps to provide for your family even after your death. But other estate planning documents are just as important, such as Trusts.
If your child has special needs, that can make planning for the future even more essential. We asked LegalShield provider lawyer Jessica Jozefowicz, an attorney with Lombino Martino, P.S., in the state of Washington, to weigh in on this sensitive subject. We are excited to share the great insight that Jessica gave us.
Jessica says, “One of the main concerns with estate planning and providing for beneficiaries with disabilities is to provide for them, without disrupting any state or federal benefits that they receive. Benefits such as Supplemental Security Income and Medicaid are income- and resource-dependent benefits.
If a beneficiary receives an inheritance, it can be considered income in the month it is received and potentially countable resource until spent down or converted to non-countable resources. As a result, it can jeopardize the beneficiary continuing to receive the governmental benefits.”
Jessica offers this helpful info: “One common way to address this is through the inclusion of a Supplemental Needs Trust.” You have a few options about how to create these trusts:
Jessica goes on, “As these are being funded with assets that are not currently the assets of the disabled beneficiary, these are considered third-party trusts. The selection of which method is most appropriate for a specific family often depends on other objectives and considerations, such as when they wish to provide for the beneficiary; the size of the estate; and the costs involved in drafting such trusts.
“Further, some governmental benefits are not income/resource dependent, so it is also important to explore the types of benefits an individual is currently receiving, along with the types of benefits that they may receive in the future. If it is unlikely that they will need income- or resource-dependent benefits, then a less restrictive option may suffice.”
“The way a Supplemental Needs Trust works is that the assets are given to the Trustee [someone you trust to follow your directions], rather than directly to the beneficiary [the dependent]. The Trustee manages the assets for the beneficiary's benefit to supplement, but not replace, what they are receiving from governmental benefits.”
Jessica explains, “The Trustee has absolute discretion on how the assets of the trust are used, but they must be used to only benefit the beneficiary. The Trustee owes a fiduciary duty to act only in the beneficiary's best interest. The Trustee uses the funds/assets to pay for goods and services for the beneficiary. The funds are paid by the Trustee to the third party for these goods and services. Because of the restrictions on how the Trustee may use these funds and the fact that the beneficiary never has any authority over how the funds are actually used, these assets are not considered to be income or a resource of the beneficiary.”
Jessica makes a strong point: “Selection of the Trustee really is a very important consideration in setting up these Supplemental Needs Trusts. Considerations include the nature of the beneficiary's disability and complexity of their needs.
A trustworthy individual more than 18 years old may serve as Trustee. Whether a sibling; other family member; or a professional fiduciary is the most appropriate choice often depends on individual family dynamics; personality of the disabled beneficiary; and the size of the estate.”
Planning for the future can get complicated with legal documents and time commitments. You don’t have to face this daunting task alone. LegalShield offers access to provider lawyers, just like Jessica, who are ready and willing to help you walk through this complex journey.
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Face the future with peace of mind as your LegalShield law firm helps you navigate estate planning.
Ms. Jessica A. Jozefowicz attended Webster University in St. Louis, Missouri, graduating Magna Cum Laude in 2000. In 2004, Ms. Jozefowicz graduated Cum Laude from Seattle University School of Law. After graduation, Ms. Jozefowicz practiced law in the private sector in various areas of law, including Collections, Employment, and Probate and joined LOMBINO ∙ MARTINO in 2009 where she has worked primarily in the areas of Collections, Consumer/Finance, Employment Law, and Estate Planning. Ms. Jozefowicz is licensed in both Washington State and in Federal Court for the Western District of Washington.
Content Specialist at LegalShield, creating educational resources about legal and consumer protection topics. She focuses on making complex legal and financial concepts accessible to readers and has contributed to various educational articles on consumer rights and protections.
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