Have you ever seen a magician make something disappear? It’s an impressive illusion, but deep down you know the object didn’t vanish into thin air. It’s still there. It’s just hidden from view.
But pointing that out ruins the magic. It’s a lot more fun to suspend your disbelief and play along with the trick. Special needs trusts kind of work the same way. They shield certain assets from view in order to convince the government to provide all possible benefits.
Palmer & Slay’s experienced team of estate planning attorneys are skilled at using this type of magic to help families in the Brandon, Mississippi area.
What is a Special Needs Trust?
A special needs trust is a pot of money or other assets managed on behalf of someone with mental or physical disabilities. The person who creates the trust is called the grantor. The grantor selects one or more trustees who manage the assets in the trust for the benefit of the individual with special needs. The individual with special needs is the trust beneficiary.
When drafted and administered properly, these trusts preserve eligibility for government programs — like Supplemental Security Income (SSI), Medicaid, Section 8 Housing, or food stamps — while providing the person with special needs the means to get the sort of extra care and support they deserve.
Special Needs Trusts Preserve Eligibility for Government Benefits
Many government programs designed to help people with special needs are means-tested. If the intended recipient makes too much money or has access to assets that could be used for their benefit, the government will deny any request for assistance.
This is because policymakers want to be good stewards of our tax dollars and ensure people who can afford to pay for their own care don’t take public money away from those who can’t.
The problem is virtually nobody can pay out of pocket for the kind of specialized care that someone with a physical or mental disability needs. And forcing families to spend down all their assets just to get their loved one’s basic needs met is cruel.
It is also bad when someone with special needs who relies on government assistance inherits a modest amount of money and loses their eligibility for benefits. They are often forced to spend all of the assets they have inherited before once again becoming eligible for government-provided benefits. In the meantime, they must enroll in different insurance, get different doctors, and find different caretakers or career programs, all while grieving a loved one.
And this is where special needs trusts come in. These trusts are a little bit magical because they can take money or other assets and make them “disappear.” The beneficiary cannot access the assets in the trust directly, but they must be used for his or her benefit.
It’s a little bit of government-sanctioned sleight of hand that nearly every Mississippi family who has a loved one with special needs should consider employing.
Preserving Your Wealth. Protecting Your Loved Ones.
At Palmer & Slay PLLC, we do a little bit of estate planning magic with special needs trusts to help families in the Brandon, Mississippi area tap into all the public benefits their loved one deserves. Please contact us today to schedule a meeting with our experienced team of attorneys.