When it comes to protecting those we love, we want to make sure that their best interests and futures remain as stable and secure as possible. Those with a vulnerable family member may be particularly concerned about putting protections in place to ensure that their loved one will enjoy financial stability no matter what the future might bring. If you have a loved one with special needs in Washington state, you may want to learn more about the potential benefits of establishing a Special Needs Trust as part of your estate plan. Essentially, special needs trusts allow an individual with special needs to enjoy financial stability while continuing to receive public benefits. As you begin to explore your estate planning options in the greater Spokane area, it can be helpful to work with a dedicated and caring estate planning attorney who can assess your specific needs and identify the best legal documents and estate planning tools that will keep your loved ones and your legacy safe and secure. Generally speaking, those creating an estate plan can decide whether to establish a self-settled special needs trust or a third-party special needs trust. Below is a brief overview of special needs trusts and some of the key differences between self-settled special needs trusts and third-party special needs trusts to help guide your decision-making process in Washington state.
How Special Needs Trusts Work in Washington State
First, it is worth taking some time to understand the purpose of special needs trusts and their role in someone’s overall estate planning vision. When someone living with a disability relies on government benefits (i.e., Medicaid, Supplemental Security Income, etc.), they are usually required to meet certain eligibility requirements in order to receive these needs-based benefits. If they inherit a substantial amount of money or receive generous financial assistance from a loved one, this new source of income will likely disqualify them from the needs-based assistance they have come to rely on. However, a special needs trust can be created to provide financial support to a vulnerable loved one without putting them at risk of losing their needs-based benefits. Essentially, the assets placed in the special needs trust will not count toward the individual’s personal income. The funds held in the special needs trust can pay for any number of expenses, including medical costs, home care, transportation, housing costs, utilities, and more. While government benefits can cover some of these costs, they typically do not cover the full amount of the expenses every month. Funds placed in a special needs trust can help to fill in these gaps.
What is a Self-Settled Special Needs Trust?
A self-settled trust, also called a first-party special needs trust, is funded by the beneficiary. If this person is mentally able to set up their own special needs trust account to protect themselves from becoming ineligible for government assistance, they may do so by creating a self-settled special needs trust. For instance, if you rely on government benefits and you stand to inherit money or property, you may choose to establish a self-settled special needs trust to ensure that you continue to receive the public assistance you need. According to the Special Needs Alliance, “Property in a first-party SNT can only be used for the ‘sole benefit’ of that beneficiary. Individual first-party SNTs may be created (and funded) only for individuals who meet the government’s definition of ‘disabled’ and are under sixty-five years of age when the SNT is established (and funded). Moreover, all self-settled special needs trusts must include a Medicaid repayment provision, which stipulates that, upon the beneficiary’s death, any remaining assets in the trust will be used to repay Medicaid before they can be distributed among the named beneficiaries. If you have any questions about the self-settled trust Medicaid provision, or to learn more about whether creating a self-settled special needs trust can help you achieve your estate planning goals, reach out to a caring and experienced Spokane estate planning lawyer today.
Third-Party Special Needs Trusts for Washington Families
Third-party special needs trusts are similar to any other type of trust, as they allow someone other than the beneficiary to place funds in the trust. Usually, a 3rd party special needs trust can be a strategic tool for the parents of a child with disabilities or special needs to receive financial support without affecting their eligibility for government assistance. Third-party special needs trusts can be included as part of someone’s last will and testament to ensure that a vulnerable loved one will be in good and stable hands upon the benefactor’ passing. For instance, you can include this provision in your will so that the third-party special needs trust will be funded upon your death. You could also set up a stand-alone third-party special needs trust during your lifetime, but you may need to prepare for and address any issues that could interfere with the beneficiary’s ability to receive public assistance. Although third-party special needs trusts do not carry a Medicaid payback provision, they have their own set of rules and requirements. Enlisting the guidance of a knowledgeable and experienced estate planning attorney is the best way to ensure that you and your loved ones enjoy the strongest estate planning protections that keep the future and your legacy as bright and secure as possible.
You and Your Family Deserve to Feel Valued and Safeguarded
Planning for a future in which you are no longer around to spend time with your loved ones can be daunting. However, taking steps to put secure legal protections in place can give you a greater sense of security and optimism. It’s never too early to start preparing for your legacy, so consider getting in touch with a dedicated and caring Spokane estate planning attorney to begin exploring your options.
When it comes to protecting your future and that of your loved ones, you deserve a customized estate plan that is tailored to address your unique needs and goals. Call Kristina Mattson Law today at (509) 998-6629 to discuss your options with a dedicated and caring Spokane estate planning attorney.
