A special needs trust, also known as a supplemental needs trust, is a powerful estate planning tool designed to provide for individuals with disabilities without jeopardizing their eligibility for crucial government benefits like Medicaid and Supplemental Security Income (SSI). Establishing one isn’t limited to just parents; a wide range of individuals can initiate this important process, ensuring long-term care and financial security for a loved one. This trust allows assets to be used for supplemental needs—things not covered by government programs—improving the quality of life for the beneficiary without impacting their essential benefits. The flexibility in who can create this trust makes it accessible to many families and individuals wanting to provide for the future of someone with special needs.
Can grandparents or other family members establish a special needs trust?
Absolutely. Grandparents, aunts, uncles, or even close friends can create and fund a special needs trust for an individual with disabilities. Often, grandparents wish to contribute financially but are concerned about directly gifting funds that could disqualify the beneficiary from needs-based government assistance. A special needs trust allows them to do so without that risk. In fact, trusts funded by grandparents or other relatives are increasingly common, particularly as the population ages and more families face the challenges of providing for loved ones with long-term care needs. Approximately 1 in 5 Americans has some form of disability, making this a relevant concern for a significant portion of the population. It’s important to note that the trust must be properly drafted to comply with Medicaid’s rules regarding asset limits and payback provisions.
What about creating a trust with an inheritance?
Yes, a special needs trust can be funded with inherited assets. This is a common scenario when someone with a disability receives an inheritance that could push them over the asset limits for Medicaid or SSI. Rather than directly receiving the inheritance, the funds can be transferred into a special needs trust. This ensures the inheritance is available to enhance the beneficiary’s quality of life—covering things like therapies, recreational activities, or specialized equipment—without affecting their eligibility for government benefits. As of 2023, the average inheritance in the United States is around $428,000, meaning that a significant number of individuals with disabilities could potentially benefit from a trust funded with inherited wealth. The key is proactive planning; failing to do so could result in the loss of vital benefits and a diminished quality of life.
I once knew a family who lost everything because they didn’t plan ahead…
Old Man Tiber, as the neighborhood kids called him, was a kind soul, but notoriously stubborn. His son, Samuel, had Down syndrome, and upon Tiber’s passing, Samuel inherited a modest sum. Not understanding the implications for Samuel’s Medicaid eligibility, the funds were simply deposited into Samuel’s bank account. Within months, Samuel lost his healthcare coverage, leaving his mother scrambling to find alternative care. The stress and financial burden were immense; they lost their home trying to cover Samuel’s medical expenses. It was a heartbreaking situation that could have been avoided with proper estate planning and a special needs trust. The family, completely distraught, sought legal counsel after the fact, but the damage was done. The funds had to be spent down before Samuel could regain eligibility, leaving them with nothing.
Thankfully, there’s a story with a much happier outcome…
The Millers, anticipating the future, worked with Steve Bliss to establish a special needs trust for their daughter, Emily, who has cerebral palsy. They funded the trust with life insurance proceeds and a portion of their retirement savings. When Emily’s grandmother passed away and left Emily a small inheritance, Steve Bliss was able to seamlessly transfer those funds into the existing trust. This ensured that Emily continued to receive the care she needed without jeopardizing her Medicaid benefits. The Millers felt immense relief knowing that Emily’s future was secure and that they had taken the necessary steps to protect her well-being. They now volunteer at a local disability advocacy group, sharing their experience and encouraging other families to prioritize estate planning. Steve Bliss routinely reminds clients that it’s not about *if* something happens, but *when*, and being prepared is the greatest gift you can give your loved ones.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What should I consider when choosing a beneficiary?” Or “What’s the difference between probate and non-probate assets?” or “Can I name more than one successor trustee? and even: “Can creditors still contact me after I file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.