If you take care of a loved one who is living with a disability, you understand the amount of time and care that goes into ensuring their day-to-day welfare. You work hard to make sure that their every need is seen to so they can lead a full life. Unfortunately, you might not always be around to support them.
Planning how best to protect your family should the worst happen is difficult, it can be especially trying for those with loved ones who struggle with disabilities. Any insecurities and indecision are doubled by the concern for your loved one’s long term well-being.
Fortunately, you are not without recourse. If you are one of the 60% of people with life insurance, or one of the additional 34% of people planning to purchase it this coming year, you can use your life insurance plan to establish a Special Needs Trust. This trust may help your loved even after you have passed.
In this two-part series, we will take a closer look into what Special Needs Trusts are and what they can do for your family, as well as how you can use your life insurance coverage to fund them.
What Is a Special Needs Trust?
A Special Needs Trust is a trust that is designed for those living with disabilities; either physical or intellectual. It is designed so that the beneficiary can continue receiving their needs-based government benefits such as Medicare, Medicaid, and Social Security after you have passed. There is an option in this trust to set up a special trustee if an individual is legally incapable of managing the trust themselves.
What Are the Benefits of a Special Needs Trust?
Special Needs Trusts are complex legal documents that, when completed correctly, can accomplish a variety of goals. Working with an attorney may help your trust accomplish the following:
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It allows you to leave both property and other resources to be used for the benefit of your loved one with a disability in a way that preserves their public assistance.
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It prevents other family members from being overburdened by the demands of caring for a relative with disabilities.
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It allows you more control over how the estate is distributed.
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It can help to sustain your loved one with disabilities over a longer period of time through careful budgeting and better management.
Stay tuned for the second installment of this series! In it, we will discuss how you can use your life insurance policy to fund your Special Needs Trust and how you can use a special needs trustee to better manage the funds after you pass.
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This article is for informative purposes only and not intended to provide legal or tax advice. You should consult with an attorney or tax accountant for professional education.
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