The Benefits of a Special Needs Trust In Your Will
In my last blog post I discussed how important it is to have very specific and detailed instructions in your Will when it comes to leaving property to your children. One of the ways to do this is to create a Special Needs Trust.
Let’s say you want to leave cash or other assets to your children but one of them (let’s call him Pete) receives has assets of less than $2,000 and suffers from a disability that qualifies him for Medicaid. Your estate is worth $200,000 so each of your four children will receive $50,000, but should Pete receive his share it will cause havoc with his public benefits and he will be disqualified for Medicaid. Of course, I don’t have to tell you about the skyrocketing cost of medications alone which will quickly eat into his $50,000 share.
But there is good news for Pete because Maryland law provides a remedy in such cases, called a Special Needs Trust. In this case, the assets deposited into this trust are not considered available to Pete for Medicaid purposes. Plus, there is no requirement to pay back Medicaid for the benefits Pete received during his lifetime and Medicaid law in Maryland does require anyone to pay back to the State should Peter die with assets remaining in the Special Needs Trust.
There are two different types of Special Needs Trusts and a case-by-case determination must be made to determine whine one you are eligible for and will best suit you and your family’s needs. Once established, the Special Needs Trust is submitted to the Office of the Attorney General for review and confirm it conforms with COMAR (Code of Maryland Regulation). Once approved, social services will not count the trust assets as part of Peter’s financial resources, thereby maintaining Peter’s qualification for Medicaid while still allowing him access to his inheritance during his lifetime.
For more information about Special Needs Trusts and a free consultation regarding setting one up, contact me today!