We can help you protect a disabled loved one’s assets with individualized planning.
When your loved one is living with a serious physical or mental disability, planning to protect his or her financial security becomes even more important. Even if your loved one could successfully manage an inheritance, the rules governing eligibility to receive public benefits are strict. Careful planning can help ensure that your loved one remains financially secure even after you are no longer able to provide that protection yourself.
At Posternock Apell, PC, our experienced estate planning lawyers pride ourselves on helping clients develop successful strategies to protect assets to provide for a disabled loved one’s future. Collectively, we have over 200 years’ experience providing legal advice and innovative planning solutions to our clients in South Jersey.
Medicaid, Social Security and even food stamps programs have specific resource and income limits that apply to determine benefit eligibility. Simply leaving assets outright to your disabled loved one could jeopardize benefit eligibility—creating a situation where your loved one would have to sell the real estate or other tangible assets in order to once again satisfy the resource limits.
When planning to protect assets for a disabled loved one, you need a lawyer who can offer personalized support and guidance. At Posternock Apell, PC, we keep our firm small so that we can provide the dedication and attention that our clients need. To learn more about protecting assets for a disabled loved one through real estate in South Jersey, call our office or fill out our online contact form today.
Understanding the need to protect assets for your disabled loved one:
Disabled individuals become entitled to receive certain public benefits, like Medicaid and Supplemental Security Income (SSI) benefits, at age 18. Although these programs provide important—and often necessary—financial assistance, those benefits are rarely sufficient to meet all of your loved one’s needs. In order to continue to qualify, however, your loved one must satisfy a means-based test.
Because of the means-based test, your disabled loved one cannot have any significant assets titled in their name without jeopardizing eligibility for public benefits. The most effective strategy for protecting assets for your disabled loved one, therefore, involves using a special needs trust. In general:
- Ownership of real estate (or other types of assets) is transferred to a trust,
- Your disabled loved one is named beneficiary of the trust,
- Management of the trust (and real estate assets) is transferred to a trustee, who may be a family member, trusted friend or another qualified third party,
- The trust does not have to be irrevocable—while the beneficiary should not have the ability to revoke the trust in order to preserve eligibility for public benefits, the trustee should have the ability to make changes that can address future changed circumstances,
- The special needs trust should be funded with other assets sufficient to maintain the underlying real estate asset (for example, income-producing property or life insurance that can be used to pay property taxes, insurance premiums and other expenses).
A special needs trust can help your disabled loved one in a number of ways, including:
- excluding the value of real estate assets from the means-based test used to determine eligibility for government benefits,
- providing a stream of rental income to benefit your disabled loved one who does not actually live in the real property funding the trust,
- providing protection in that the trust will also be structured to ensure the funding necessary to maintain the real estate.
Our South Jersey estate planning lawyers can help you evaluate options for protecting assets for your disabled loved one through real estate:
A special needs trust can be set up in a number of ways depending upon the needs of the family. Our lawyers are here to create the formal documents needed to make the strategy effective. For example, a special needs trust funded with real estate can:
Be included in your will, so that the real property will be transferred for the benefit of your disabled loved one upon your death,
- Be established within your existing inter vivos trust so that it will avoid probate,
- Stand alone as its own trust to begin benefitting your loved one even prior to death.
Real estate assets are obviously valuable in any number of ways that go beyond providing for housing needs. However, for a disabled loved one who lacks the resources needed to maintain the property or needs the income provided by government programs, real estate assets can become a burden without advance planning. In fact, your disabled loved one may have no choice but to sell the asset and spend down the proceeds to qualify for benefits.
Schedule a free phone consultation to learn more about using real estate to protect assets for your disabled loved one in South Jersey.
At Posternock Apell, PC, our trusted estate planning lawyers are here to walk through the various strategies that can be used in protecting assets through the use of real estate for your disabled loved one. To learn more about how we can help, call our office or fill out our online contact form today.
Frequently Asked Questions about protecting assets for a disabled family member.
FAQ: If real estate assets are held by a first-party special needs trust, what do I need to know?
First-party special needs trusts, while valuable in certain situations, can create complications in connection with government benefits after the beneficiary’s death. When real estate is transferred into a special needs trust, the family may envision the real estate remaining in the family indefinitely. However, when the first-party structure is used, the trust assets are subject to recapture after the beneficiary’s death. This means that the assets can be sold and used to repay any SSI, Medicaid or other government benefits received by the beneficiary during life. It is therefore important that the correct trust language and form are used when protecting real estate assets.
FAQ: What if real estate assets were left by will to my disabled loved one who is relying upon income from government programs. Is there anything that you can do to help?
We may be able to petition the court to reform the will. If we can gain court approval to amend the will language to include an appropriate special needs trust, we may be able to protect your loved one’s right to continued government benefits.