Special Needs Trust vs. Will: Which is Right?

As a family with special needs, you are concerned about your loved one’s well-being and want to ensure that they have a secure future. However, you may not know what legal documents to use to achieve this goal. Two of the most popular options are a special needs trust and a will. Both of these documents have their advantages and disadvantages, and it is essential to know which one is right for your family.

 

 

A special needs trust is a legal arrangement that provides financial support for a person with a disability while protecting their eligibility for government benefits, such as Medicaid and Supplemental Security Income (SSI). The trust is set up by a parent, guardian, or court, and it is managed by a trustee, who has the discretion to distribute the funds according to the trust’s terms.

A special needs trust can be funded with various assets, such as cash, real estate, and stocks. The funds are used to pay for expenses not covered by government benefits, such as dental care, transportation, and entertainment. The trustee has the power to use the funds for the beneficiary’s benefit, but the funds cannot be used for items that would disqualify the beneficiary from government benefits.

 

 

A will is a legal document that outlines how a person’s assets will be distributed after their death. A will can include provisions for the care of a person with a disability, but it does not provide ongoing financial support like a special needs trust. The will also does not protect the person’s eligibility for government benefits, and it may not be the best option for families with special needs.

 

 

If you have a family member with special needs, a special needs trust may be the better option. A special needs trust provides ongoing financial support while protecting the person’s eligibility for government benefits. The trust can be funded with various assets, and the trustee has the discretion to distribute the funds according to the trust’s terms. The trust can also be customized to fit the needs of the beneficiary, and it can be managed even after the parent’s death.

 

On the other hand, a will may be the better option if you have limited assets or if you do not have a family member with special needs. A will can still provide for the care of a person with a disability, but it does not provide ongoing financial support like a special needs trust. A will can also be challenged in court, and it may not be the best option for families with special needs. Probate is typically required for wills which could cost your estate $3,000-10,000 in additional costs and fees.

 

 

In conclusion, if you have a family member with special needs, a special needs trust may be the better option. It provides ongoing financial support while protecting the person’s eligibility for government benefits. A will may be the better option if you have limited assets or if you do not have a family member with special needs. Regardless of your choice, it is essential to consult with an experienced attorney who can help you make an informed decision.

 

Give us a call at 208-406-9885 or use the “Schedule Now” button to schedule an appointment to discuss which type of planning can benefit your family.