Sometimes, a person in Kansas City with special needs receives government benefits such as Medicaid benefits or Supplemental Security Income. However, did you know that if a person receiving benefits comes into an inheritance, his or her ability to continue receiving benefits could be affected?
There are certain income and asset requirements that an individual must meet in order to receive Medicaid or Supplemental Security Income. If an individual’s net worth is too high, he or she may not qualify for such benefits. An inheritance could push a person over these net-worth restrictions. When this happens, an individual may then need to use his or her inheritance to pay for his or her care needs that were formerly covered by his or her government benefits. Obviously, this is not a desirable result for those in Kansas City who plan to leave an inheritance to a loved one with special needs.
However, such a result may be avoided in some circumstances through the creation of various special needs trusts. Such trusts include pooled trusts, third-party trusts and self-settled trusts. In essence, these trusts hold assets that exceed the Medicaid or Supplemental Security Income net-worth requirements. The trust, not the individual, retains ownership of the assets, and then distributions can be made to the trust beneficiary to pay for what is not covered by Medicaid or Supplemental Security Income.
Special needs trusts can be complicated to complete and should not be handled alone. Instead, an estate planning attorney can be consulted to determine what type of trust one should create to best suit his or her needs and the needs of his or her loved one. The webpage concerning special needs trusts on our website may prove to be of use to learn more.