3 tips when planning for a special needs beneficiary

On Behalf of | Apr 4, 2024 | Estate Planning

Estate planning is a defining step in determining how your legacy will be managed in the event of your passing, helping to ensure that your assets are distributed according to your wishes and providing for the ongoing care and support of your loved ones.

When a special needs beneficiary is involved, the planning process may need to assume a slightly more intricate and specialized approach to better ensure that their unique financial, medical and quality of life needs are adequately addressed both during your lifetime and after your passing. The following tips can help guide you when effectively planning for a special needs beneficiary.

Establish a special needs trust

One of the first and most important steps when planning for a special needs beneficiary is to establish a special needs trust. This type of trust allows you to set aside assets for the beneficiary’s benefit without jeopardizing their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). By placing assets into the trust, you can ensure that they are managed and distributed in a way that supplements the beneficiary’s needs without interfering with their eligibility for essential support programs.

Choose a trustee carefully

The individual you choose as trustee plays a critical role in the management and administration of the special needs trust. It’s important to select someone trustworthy, responsible and capable of handling the complexities associated with managing assets for the benefit of a special needs individual. You may consider appointing a family member who is familiar with the beneficiary’s needs and preferences or opt for a professional trustee with expertise in special needs planning.

Consider preparing a letter of intent

A letter of intent is a valuable document that provides detailed instructions and insights into the care and preferences of the special needs beneficiary. While it is not a legally binding document like a trust, will or power of attorney, a letter of intent serves as a guide for future caregivers, trustees and advocates who will be involved in the beneficiary’s life.

Finally, note that when planning for a special needs beneficiary, seeking legal guidance can help ensure that all legal requirements are met and the best interests of the beneficiary are upheld throughout the estate planning process.