When someone you love has a significant disability, caring for their daily needs can become the central focus of the family. Many families want to plan for their loved one’s long-term needs. One way to prepare for your loved one’s future is to create a special needs trust. This unique legal device can help pay for certain expenses without endangering the beneficiary’s income-sensitive government benefits like Medi-Cal (California Medicaid) and SSI (Social Security Income). The question is: How do you put money in the trust while keeping the family budget? The good news is that there are ways to fund your disabled loved one’s special needs trust while keeping within your family’s means.
Friends and Family Contributions
One way to start funding your loved one’s special needs trust is by asking family and friends to make gifts and contributions. Rather than spending more on a birthday or holiday present, you could ask for a small financial deposit into the trust. If you start the trust when your loved one is young, these gifts can add up to be a meaningful amount over time.
Estate Planning
Another way to help your loved one is to direct any inheritance to their special needs trust. This act will benefit the individual in two ways: 1) placing funds or assets in their trust, and 2) protecting their government benefit eligibility. If your loved one were to inherit directly, his or her inheritance would be counted as income for purposes of government program eligibility. This bequest could result in your loved one being disqualified from receiving the benefits they depend on to survive.
Life Insurance
You or another friend or family member could buy an insurance policy and name your loved one’s special needs trust as the beneficiary. Depending on your situation, a term-life policy may be an affordable option. There are various insurance products, and it would be best to discuss the options with an insurance professional.
Having a special needs trust in place for a loved one with a disability is one of the best ways to support their comfort and care. At the Law Office of Alice A. Salvo, we are special needs attorneys who have experience helping families find the right solutions for their loved ones. Schedule a consultation today to explore your options and make informed decisions.