Do you have a loved one who relies on public assistance to help cover their bills? If so, you must be careful about how you plan for them in your estate documents.
Someone who receives public benefits is likely entirely or mostly reliant on these benefits to cover their major expenses. It can be very difficult to obtain government benefits, such as Medicaid, but it’s all too easy to lose them due to poor estate planning.
Consulting with a dedicated estate planning lawyer can help you avoid this situation by using a supplemental needs trust. Assets held in a supplemental needs trust do not reduce the beneficiaries’ present benefits or disqualify them from receiving future benefits.
Another term for this trust is a special needs trust. It can be a third-party trust, funded with assets that belong to the creator of the trust, or a first party trust which is created by a guardian, grandparent or parent using the funds belonging to the beneficiary. When the beneficiary’s assets are used, a first party special needs trust requires that the state benefit provider be reimbursed for lifetime benefits paid by it on behalf of the beneficiary.
Make sure you discuss the specifics of your intended estate plan and your goals for protecting a loved one with special needs well in advance to avoid many common challenges and obstacles. Contact a Massachusetts estate planning lawyer for further details.
