Special Needs Planning FAQ

Q: What is special needs planning?

People planning for beneficiaries with a disability must address the following concerns:

· Where will the beneficiary with special needs be living and who will provide for their personal needs?
· Who will make medical decisions and arrange for proper care?
· How can financial assets be left to a beneficiary with special needs without sacrificing the beneficiary’s receipt of government benefits?
· How can an estate plan be arranged so that the beneficiary with special needs can live as complete and fulfilling a life as possible?


Q: Why can’t money be given directly to a beneficiary with special needs?

Whether or not a beneficiary with special needs will receive government benefits will depend on the financial resources at the beneficiary’s disposal. Generally speaking, the beneficiary will lose access to government assistance if he or she has access to other resources. These outside resources will need to be exhausted before government assistance will become available again.


Q: Why shouldn’t a beneficiary with special needs be disinherited?

By disinheriting a beneficiary with special needs, he or she will not be able to benefit from the additional resources that may be crucial in allowing that beneficiary to lead a fulfilling life. Simply leaving the assets to someone else is not often a workable solution, since that person is under no obligation to use the funds for the disabled beneficiary. Furthermore, should that person die, get divorced, file bankruptcy or get sued, those funds cannot be set aside and protected for the disabled beneficiary.


Q: What is a special needs trust?

A special needs trust is a trust that holds assets for the benefit of a beneficiary with special needs. It is specifically designed to provide for the beneficiary’s needs and expenses that are not covered by government assistance. Therefore, the trust supplements, but does not replace, government benefits. In most states, a special needs trust will not affect a disabled beneficiary’s eligibility for government assistance as long as the trustee has the sole and absolute discretion to determine the amount, purpose and method of distribution.