“Krissi, I have a grand­son with spe­cial needs, and I’d like to pro­vide for him af­ter I die with­out hurt­ing his abil­ity to re­ceive gov­ern­ment as­sis­tance. What is the best way to do that?” - Ge­orge

Northwest Arkansas Democrat-Gazette - - VOICES -

An­swer: Ge­orge, peo­ple with spe­cial needs will of­ten re­quire life-long ther­apy and spe­cial liv­ing ar­range­ments to live in­de­pen­dently, so our clients of­ten want to leave ad­di­tional money for these fam­ily mem­bers. How­ever, there are a few things to be aware of be­fore mak­ing dis­tri­bu­tions to them.

Many state pro­grams that ben­e­fit peo­ple with spe­cial needs have as­set lim­i­ta­tions. Money left di­rectly to the spe­cial needs will of­ten dis­qual­ify them for some of the ben­e­fits they are re­ceiv­ing. If they are not al­ready re­ceiv­ing ben­e­fits, then these dis­tri­bu­tions may make it take longer for them to start re­ceiv­ing as­sis­tance.

To avoid this, some peo­ple leave money to a trusted fam­ily mem­ber with the un­der­stand­ing that the funds will be used for the spe­cial needs per­son’s care. This works as far as the as­sets not be­ing counted against the spe­cial needs per­son, but there are other risks. For ex­am­ple, the funds are now sub­ject to the fam­ily mem­ber’s cred­i­tors. The money could be lost if the fam­ily mem­ber got di­vorced, filed bankruptcy, or was sued.

The best way to leave as­sets to a spe­cial needs per­son is to cre­ate a Sup­ple­men­tal Needs Trust (SNT). The funds in the SNT won’t be counted as an as­set, but can be used to en­hance the life of the per­son with spe­cial needs. An­other ben­e­fit - a SNT can al­low a fam­ily mem­ber to con­trol the money, while pro­vid­ing pro­tec­tion from their own cred­i­tors. The rules for a SNT are strict, but it is the best of both worlds. It al­lows the spe­cial needs per­son to con­tinue re­ceiv­ing ben­e­fits from the state while pro­vid­ing them with ad­di­tional money for needs not other­wise met by their ben­e­fits and, even bet­ter, for the fun things in life.

We have of­fices in Spring­dale, Ben­tonville, and Fort Smith. For more in­for­ma­tion on es­tate plan­ning and elder law is­sues please call our cen­tral num­ber of 479.750.1101 and we will get you di­rected to the of­fice near­est you!

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