Parents and individuals with elderly loved ones occasionally have more than the usual health, education, maintenance, and reasonable support (aka “HEMS”) issues in terms of planning for the future.
I was a babysitter for a number of years for a young girl stricken with severe cerebral palsy. Her parents were in their late 40s’/early 50’s. Mom stayed at home and Dad owned a small business. I always wondered what her parents would do if her father suddenly lost his small business or if something, heaven forbid, happened to him.
Certain types of trusts provide a unique way of planning for scenarios just like that. They’re called “Special Needs Trusts” and are carefully drafted to ensure that the special needs of loved ones such as disabled children, parents, or the elderly are properly cared for.
You may be thinking that the government provides benefits, and wondering about the value of these instruments. Well, as many disabled individuals, elderly, and their family members can tell you, government benefits are rarely sufficient en toto to cover all of the expenditures and provide a quality of life that was provided when one or both parents’ or family members’ income supplemented those benefits. So Special Needs Trusts provide a way to truly provide for those who will not be able to provide for themselves because of disability or infirmity.
However, as mentioned, these trusts must be drafted carefully so as not to create a situation where your loved one suddenly becomes ineligible for government benefits because of an increased income. Certain benefit programs are need-based and income from a Special Needs Trust may result in disqualifying your loved one from the program. Again, this doesn’t happen just to the disabled, but folks receiving Medicare and certain Veteran’s benefits are also affected.
So the good news is your attorney has a way, with a Special Needs Trust to help you provide for a disabled or elderly loved one. The caveat is that your attorney must be mindful of the needs-based benefit programs that can turn a good supplemental plan into a plan made of quicksand.
