What if you have a loved one who is disabled or unable to care for him- or herself, and you want to make sure he or she is financially taken care of if something happens to you — or you just want to put aside some money for him or her? This is when you should contact a Colorado estate attorney and set up a special needs trust. Whether your loved one is an elderly parent, a mentally impaired child or a disabled spouse, a special needs trust has some significant benefits when it comes to protecting assets you wish for them to have.
One benefit is that the assets will be protected from being used against your beneficiary if he or she needs long-term Medicaid benefits. Medicaid will often not pay for medical care for a person unless he or she has depleted his or her own assets first. By the time Medicaid benefits kick in, a patient with a catastrophic illness or severe medical problems may have been forced to deplete all of his or her assets. If the assets are in a trust, they can be excluded from disqualifying a person from Medicaid benefits.
Another benefit, among many others, is if the beneficiary needs to apply for Supplemental Security Income, or other government benefits. There are certain requirements when it comes to their financial status. If you give money or assets directly to your beneficiary, he or she can be disqualified because his or her financial status may exceed those requirements. However, if a trustee has control of those assets instead of the beneficiary, government entities may not consider those assets.
Using a special needs trust is the best way to protect any assets you want to bequeath to your loved one, however, it is best to have an attorney review all the facts and requirements with you. You should know exactly how a trust can help your special needs beneficiary, what the requirements are and how it can be customized to fit your estate planning needs.