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Palm Springs Law Blog

Monday, March 29, 2021

The 6 Biggest Mistakes People Make Regarding Supplemental Needs Trusts

When a loved one has special needs, it's important to ensure that they are protected even after you are gone. Many parents, wanting to care for their children with special needs, will leave their children with disabilities a large inheritance.

However, while ensuring that a loved one who has special needs receives enough financial resources to meet their long-term care needs, it’s also important not to risk losing the eligibility for them to receive governmental aid, such as California’s Supplemental Security Income (SSI) or Medicaid program, Medi-Cal.

Supplemental Needs Trusts

A Supplemental Needs Trust (SNT), commonly called a Special Needs Trust, is a legal document that holds assets for individuals with disabilities, giving someone (a trustee) the legal right to manage money within the trust and make financial decisions on behalf of the individual with special needs.

A Supplemental Needs Trust allows for a loved one with a disability to receive money for their future care without sacrificing their eligibility for benefits. However, in order for a Supplemental Needs Trust to work in this manner, it must be properly prepared. Here are 6 of the biggest mistakes that people make regarding Supplemental Needs Trust.

1. They procrastinate.

While most of us don’t like to think about our own mortality, the truth is that we don’t know when we will become incapacitated and/or pass away. So while you may feel that you have some more time to create a Supplemental Needs Trust for your loved one with disabilities, you never know. Plus, having this trust in place when they are younger allows for others to contribute to it over the years without causing any financial penalties for your loved one.

2. They try to do it themselves.

There’s a reason only surgeons operate on people. Some things are just better left to the professionals. One such thing: establishing a Supplemental Needs Trust. Since these trusts are subject to both state and federal laws, it’s best to find a California estate planning attorney who understands the complexities of estate planning and can explain your options.

3. They don’t clearly communicate responsibilities to Trustees

In much the same way that you would interview a candidate for a job position, so too must you speak with a potential trustee. There is much responsibility that comes with being selected to serve as a trustee for a loved one with special needs. That’s why it’s important to speak to the individual beforehand and share all potential responsibilities and expectations with them.

4. They fail to revisit it over time.

As with many estate planning documents, it’s important to look at a Supplemental Needs Trust every so often over time. Since life can change from day to day, it’s important that as the care needs of the person with disabilities change, the trust is updated every few years to reflect the current situation.

5. They discount its importance for adults, too.

Although it’s best to create a Supplemental Needs Trust sooner rather than later, it doesn’t mean that it’s only important for young children. In fact, sometimes an individual may not have an identifiable disability until adulthood. Therefore this type of trust can also be created when a loved one is already an adult.

6. They fail to speak with a qualified attorney.

There’s no doubt that creating a Supplemental Needs Trust can be complicated. But with such an important purpose it’s in your best interest – and that of your loved one with special needs – to speak with a qualified California estate planning attorney.

Heritage Legal, PC Helps Those in California Who Need a Supplemental Needs Trust

At Heritage Legal, PC, we know how important it is to be sure that our family members are always looked after and protected. We can help you to create a Supplemental Needs Trust (and comprehensive estate plan) that fulfills all of your wishes. To learn more or to schedule a free consultation, contact us today!


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