Estate planning is one of the most important things you can do for the future of your family. It doesn’t just ensure your wishes are carried out after you’re gone; it also lets you continue caring for your family in all the ways they’ve grown accustomed to. This is helpful to every family, but it is particularly helpful for specific families.
Estate planning is especially beneficial for families who have a special needs child. In Minnesota, as in other states, specific planning can ensure that your child is well cared for after you’re gone. It can bring you peace of mind in the present and provide stability for your child in the future.
In this article, we’ll discuss the benefits of estate planning in general but also focus on how it particularly benefits families with a special needs child. If you are considering estate planning in Minnesota, Waldron Law Offices, Ltd. can offer you tailored advice based on your specific needs. If you have questions, call our Wayzata office today.
Estate Planning in Minnesota
Estate planning is the process of preparing a plan for what happens to everything you own after you die or become incapacitated. It’s an important step for anyone looking to secure their financial future and ensure their loved ones are taken care of according to their wishes.
When you start estate planning, you decide where your house, bank accounts, and personal items go and offer instructions on how they should be distributed. The most common version is a will, but there are also a variety of trusts that help you meet specific needs. Without at least a will in place, these important matters are left for the state to decide. For families with special needs members, it can be particularly hard to provide instructions for their care without some form of estate planning.
Trusts and Special Needs Children
Trusts in estate planning are a special arrangement where you place important assets in the care of someone you trust (a trustee) for the benefit of a family member (beneficiary). Trusts are particularly useful because they can provide more control over how your assets are used and distributed, especially in complex family situations.
When it comes to families with special needs children, trusts are essential. They can outline the type of care and support your child needs and designate caregivers. They also provide your child with the financial resources they will need throughout their lifetime to cover their care. Most importantly, they can provide for your child without affecting their eligibility for government benefits like Medicaid or Supplemental Security Income (SSI). That way, your child never has to depend on only one source of income for the care and support they need.
As you can imagine, this process can be a complicated one. So, it’s always best to discuss your options with an experienced estate planning attorney. We can answer all your questions and provide guidance based on your child’s specific needs. We can give you the peace of mind that comes with knowing your child is comfortable, even if you’re not around in the future to make all the decisions.
A Special Needs Trust
A special needs trust, also known as a supplemental needs trust, is a trust that is specifically designed to benefit an individual who has a disability. This type of trust is set up to manage assets for their benefit while also preserving their eligibility for government assistance programs like Medicaid and Supplemental Security Income (SSI).
In Minnesota, as in other states, a special needs trust can be an important tool for estate planning when you have a family member with disabilities. It’s meant to provide for your child’s additional needs and supplement what the government programs offer. When done correctly, they ensure that your child can still receive the important government benefits they require because assets in the trust are not counted as personal property.
Types of Special Needs Trusts
A first-party special needs trust is funded with assets belonging to the person with the special needs. This type might include funds from an inheritance, a lawsuit settlement, or their own personal savings. It allows the beneficiary to use these assets without losing eligibility for public assistance benefits. However, when the beneficiary dies, the government may reclaim some of these funds to repay Medicaid benefits.
A third-party special needs trust is set up by someone other than the beneficiary, in this case, a parent like you. Unlike the first-party trust, there’s no requirement to repay Medicaid after your child passes away, so any remaining funds can go to other family members or beneficiaries.
Finally, pooled trusts are managed by nonprofit organizations and involve combining assets from multiple people with special needs into a single trust. Each beneficiary has their own account, but the funds are pooled for investment purposes. This is an excellent option if your child requires the care of a group home, assisted living home, or residential care facility.
This type of trust is open to beneficiaries of any age, so older family members who don’t qualify for a first-party trust can be eligible for this one. After the death of the beneficiary, the trust may keep a portion of the remaining funds before reimbursing the state for Medicaid expenses, depending on the specific terms that you’ll set up beforehand.
Funds from all of these types of trusts can be used for a variety of things, including education, recreation, counseling, and medical attention beyond the basics covered by Medicaid.
Call Waldron Law Offices for Your Estate Planning Needs
When you have a special needs child, you want to know they’re cared for, especially when you’re not around. You want to make sure they are always supported, both financially and emotionally. Estate planning is the best way to put your mind at ease, and Waldron Law Offices, Ltd. can help you on this path. We know all the ways to distribute your assets effectively, and we take time to listen to your needs. By working together, we can create an estate plan that benefits both you and your special needs child. Call our office today at (952) 471-0940 for a free consultation.