Using your estate plan to help a relative who has a disability

If you have a relative who has a disability, you may worry about his or her ability to pay for basic living expenses and essential medical care. Fortunately, government programs, like Supplemental Security Income and Medicaid, offer financial assistance to those with limited income and other assets.

Because needs-based government benefits are often meager, you may want to use your estate plan to improve your relative’s overall quality of life. A special needs trust accomplishes this objective without sabotaging your loved one’s eligibility for ongoing financial help from the government.

Qualifying for government assistance

To remain eligible for means-tested government benefits, your relative must not use funds from the special needs trust to pay for the same expenses that public benefits traditionally cover. The trust may pay for many other costs, though. These usually include the following:

• Home improvements
• Out-of-pocket medical care
• Medical equipment
• Travel and recreation
• Vocational training
• Other supplement expenses

Designating a special needs trustee

The trustee you designate to manage the special needs trust is one of the trust’s more important features. This individual plays a few critical roles, including recordkeeping, reporting and compliance monitoring.

More importantly, the special needs trustee also collaborates with your relative’s care team. If your loved one is unable to access essential services, the trustee may help connect him or her with a physician, counselor, therapist or another relevant professional.

Furthermore, if your relative’s Medicaid or other health insurance programs do not cover the costs of additional professional services, the special needs trustee may approve disbursements from the trust to pay for the ancillary care your relative needs to thrive.