If you have a family member with special needs adults, you probably already know that they are more vulnerable than your other family members when it comes to manipulation or abuse. What you may not have considered is how a financial windfall after you die could leave your child in a precarious position.
Not only could a lump sum inheritance disqualify someone with special needs from receiving Medicaid and other state benefits on which they rely, but it could also leave them at risk of abuse or mistreatment by the people they trust and depend on.
Financial abuse is more common than people want to admit. It can happen to vulnerable older adults and individuals with resources who have special needs. People ranging from new acquaintances to family members may manipulate, threaten or coerce an individual into handing over assets that they should rightfully retain. Creating a special needs trust reduces the risk of someone financially abusing your special needs family member.
When you create a trust, you can create all kinds of restrictions on how someone uses the assets with which you fund the trust. For example, it is common for people to restrict the use of trust funds for only standard cost-of-living expenses. Other times, the person creating the trust may create a financial limit meaning that there is a maximum disbursement available in any given month or year.
Both of these methods help ensure that there will be remaining assets available for someone for many years to come. By creating a trust and limiting the use of its resources to the coverage of cost-of-living expenses and enrichment activities for a special needs loved one, you drastically increase the amount of difficulty someone has when attempting to financially manipulate your special needs loved one.
However, particularly if that individual is a family member or named as trustee, it is still possible for someone to defraud the beneficiary of a trust.
By naming two or more trustees, you help ensure that one individual cannot easily access resources improperly. After all, once someone withdraws and uses resources from the trust, it will be difficult if not impossible to regain them.
The best option is to protect those assets from someone who would financially abuse the beneficiary of the trust from the early planning stages. The sooner you create a special needs trust and the more careful you are, the lower the risk of financial abuse for your loved one after you die. Contact the Law Office of Alice A. Salvo to have a special needs trust created that can reduce financial abuse for your special needs adult.