847.292.1800
422 North Northwest Highway, B-5
Park Ridge, Illinois 60068

Special Needs Planning

Special Needs Planning

There are special considerations that must be made if you are planning for a loved one with a disability. For example, if you have a disable family member and you want to leave them an inheritance, you want to do so in a way that does not jeopardize the continue receipt of any much needed government benefits.

Government disability benefits, such as Supplemental Security Income (SSI), are designed to help people with disabilities who have limited income and resources. If you have assets totaling over $2,000, then you will not be eligible to receive these government benefits. Special needs planning establishes a way for you to leave your assets to a loved one with a disability in a way that does not result in the loss of these valuable benefits.

The Law Office of Thomas J. Hansen understands how important government benefits can be. This is why Attorney Thomas Hansen works tirelessly to protect your assets and right to government benefits. He knows he is working to ensure a sound financial future for you and your loved ones and will do so with the full power of the law.

Using Trusts for Special Needs Planning

A special needs trust is established by an individual, referred to as the “settlor,” on behalf of the disabled individual who will be the trust beneficiary. The trust can be funded by putting in assets belonging to the beneficiary or assets from someone else that never belonged to the beneficiary, which creates a third-party special needs trust. The assets are held in trust and distributed to pay the needs of the beneficiary.

The trust document which establishes the trust should contain language that restricts the distribution amounts the trustee is allowed to make. If the trustee makes distributions that are too large, it could jeopardize the beneficiary’s government benefits. If the beneficiary’s own assets were used to fund the trust, then the trust document must contain a provision directing any remaining trust funds to be used to repay the State Medicaid program if they were receiving Medicaid benefits. The trust can also specify that if there are trust funds available after the State Medicaid program has been paid back that it should be distributed to other named beneficiaries.

Another type of special needs trust is referred to as a “pooled income trust.” In this type of trust, assets are pooled with the assets of other disabled beneficiaries for efficient investment and management of the trust funds. A disabled person creates a sub-account within the pooled trust and, after signing a joinder agreement, becomes a beneficiary of the trust. The trust is established and managed by a non-profit group. When a trust beneficiary dies, the non-profit retains their assets for the benefit of other disabled individuals. If the non-profit does not retain the assets, the remainder of the deceased beneficiary’s trust assets will be distributed to the State Medicaid Program if they were receiving Medicaid benefits in order to repay benefits paid on beneficiary’s behalf.

While holding assets in the trust allows the disabled beneficiary to qualify and keep qualifying for state benefits, it can also be used to provide supplemental income for the beneficiary. State benefits are meant to pay for basic needs such as food and shelter. Therefore, a trust should not be intended to provide for these things. The trustee can pay for other things the beneficiary may need, but should not make cash distributions directly to the beneficiary. These types of payments can disqualify the beneficiary from receiving government benefits. Additionally, the trustee must have absolute control over distributions made from the trust. If the beneficiary has any authority to make withdrawals, the trust protection will not be effective and government benefits are jeopardized.

A special needs trust is a useful tool that can also be used after you have been injured in an accident. If you are trying to get government disability benefits afterwards, any receipt of an insurance company settlement or money judgment in your favor could jeopardize your receipt of the benefits. Set up a special needs trust and put the proceeds of a lawsuit settlement in there to secure your right to the benefits.

A Special Needs Planning Attorney You Can Trust

Every family has different needs.  Attorney Hansen is here to develop financial plans that meet your unique circumstances. If you or a loved one is receiving government disability benefits, contact the Law Office of Thomas J. Hansen. Attorney Hansen will put a special needs plan in place that ensures the continued security of your loved and ensure they will continue to receive the government benefits they deserve.




© 2017 Thomas J. Hansen, Ltd. | Disclaimer
422 North Northwest Highway, B-5, Park Ridge, IL 60068
| Phone: 847-292-1800

Living Trusts and Wills | Power of Attorney | Residential and Commercial Real Estate | Tax Appeals | Tax Audits | Tax Return Preparation | Medicaid Planning | Estate Planning | Advanced Estate Planning | Special Needs Planning | Probate & Estate Administration | Planning for Children | Asset Protection | Federal Tax Controversy | | Links | Downloads

Attorney Web Design by
Zola Creative