Omaha Special Needs Planning Lawyer
Planning for the future can be difficult for anyone because we never know the circumstances that might present themselves tomorrow. However, for those who have loved ones with special needs, this planning process can be even more confusing yet even more important. Estate planning that involves a person with special needs is highly delicate because the decisions could not only impact their financial future but also their quality of life.
At Stange Law Firm, our attorneys understand what a strong estate plan can mean for the stability of a person with special needs. Our team of trust attorneys recognizes the benefits of utilizing a special needs trust that can help provide supplemental financial support for daily needs. However, without proper planning, the potential benefits could turn into disasters quickly. Working with an attorney can help ensure that the right needs are being met to put your mind at ease.
Special Needs Trusts
A special needs trust, often known as a supplemental needs trust, is a particular type of estate planning. It is utilized when a person has a mental or physical disability and they wish to protect their financial future, or their loved ones are looking to do the same. Through this type of trust, the beneficiary can receive needed and valuable supplemental income without the fear of impacting their ability to qualify for government benefits such as Medicare. The supplemental income must be used on specific types of expenses related to quality of life or care for the disability.
There are two types of trusts that could be established, as allowed by the federal government. These include:
- Third-Party Trusts: This type of trust is established by the parents, grandparents, or any other legal guardians of an adult who has a disability. This type of trust is funded by the third parties that establish it.
- Self-Settled Trusts: Also known as first-party trusts, these allow beneficiaries who are under the age of 65 to create their own way of protecting their assets. This type of trust is funded with the beneficiaries’ own assets.
Utilizing one of these types of trusts is generally the most efficient way to plan for those with special needs. However, there are other trusts that are known as support trusts. These work similarly in the types of expenses they cover, such as daily hygiene needs, transportation, clothing, utilities, etc. However, a support trust does not allow for any continued benefits from programs such as Medicaid or Supplemental Security Income.
Types of Expenses Covered by Special Needs Trusts
To maintain qualifications for certain government programs, the assets in a special needs trust must be applied to specific expenses only. These expenses are thought to help maintain a quality of life for the person with a disability. Expenses include:
- Health and medical care
- Dental and eye care
- Social opportunities
- Legal services
- Consultant services
- Special education
- Rehabilitation
- And much more
Because the government programs provide the necessary funds for clothing, transportation, and other daily expenses, the supplemental income must be used in a way that supports the day-to-day needs of living with a disability.
Many people with a disability also want to have a sense of independence and freedom within their own lives. One of the drawbacks to a special needs trust is that it is controlled by a trustee, who helps provide the funds when requested. Unlike a bank account, the beneficiary cannot simply take the funds themselves but must go through the trustee, limiting their feelings of independence.
Why Is a Special Needs Trust Important?
The time, steps, and costs of setting up a trust may not seem advantageous at first glance, but understanding the deeper impact of these protections can help make the decision of establishing one easier. The purpose of such trusts is to help keep the person with disabilities eligible for government programs while also allowing their future financial needs to be protected from creditors. That way, they can maintain the quality of care they need.
The government programs that are set up to help provide funding will place limitations on the amount of available income that a person with disabilities may have before they still qualify. When assets are held for that person in guardianship, it is considered to be a part of the available funds. However, when those assets are held in a trust, it is not considered available and therefore will not impact the person’s ability to qualify for benefits. This is often because, upon the death of the beneficiary or at the legal end of the trust, the assets that remain may be used for paying back some of the Medicaid expenses, or they are returned to the third party that established the trust.
Setting Up a Special Needs Trust
Determining when to set up a special needs trust is an individual decision. However, many will take the steps while the disabled person is still a child. This helps ensure that there are financial resources available for use as they age, allowing them to support themselves in independent living. While they will still face many challenges, knowing that their financial needs are being met can help put the worries and fears to rest. While using a trust is not complete independent freedom, the ability to use funds and support oneself can help create a sense of independence that one may not otherwise have.
Omaha Trust Attorney
At Stange Law Firm, we know how important these decisions can be for creating peace of mind and financial stability for the ones you love. There are many expenses that come with a disability, and knowing that there are funds available from public sources as well as private sources can help create a strong plan for meeting those needs moving forward. If you have questions about special needs trusts or are ready to set one up, contact our offices today and let our skilled and experienced trust attorneys help you create the right trust for you and yours.
Douglas County (Omaha), Nebraska Office (by appointment only):
402-509-1801
9202 W. Dodge Rd., Suite 302, Omaha, Nebraska 68114
