If you’re reading this article at Special Needs Alliance, and have a child or family member with special needs, you’ve probably already set up a third party special needs trust (sometimes called a “supplemental needs trust”) and named it as a beneficiary of your will or living trust. If not, you might want to read some other Voice® articles first, including Developing an Estate Plan for Parents of Children with Disabilities: A 15-Step Approach and Your Special Needs Trust (“SNT”) Defined. Your goal will typically be to leave assets that can benefit your family member with a disability without causing his or her loss of needs-based government benefits. Further, you will likely want to protect those assets at your family member’s death from claims against his or her estate, or in some cases during his or her lifetime, for Medicaid or other public benefits received.
As is often the case, what seems like a simple process that anyone can do without legal advice is not at all simple. Indeed, the naïve belief that you can just go online and fill out a form to designate your trust as beneficiary of your retirement accounts can easily result in an income tax or public benefits eligibility disaster. If your estate plan makes your trust a beneficiary of your retirement plans, and your trust includes multiple beneficiaries of varying ages or charitable beneficiaries, you should seek review from a competent special needs attorney.
