What Are the Benefits of a Special Needs Trust in Illinois?

IL special needs trust attorney, IL estate planning lawyerA special needs trust is typically established by parents for a disabled child, or for disabled adults who are eligible for aid that will be lost if there are assets in their parent or guardian’s names only. It is a legal and fiduciary arrangement that allows a physically or mentally disabled person to receive income without interrupting or interfering with his or her eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare, or Medicaid. For disabled beneficiaries, this financial support can make their lives more enjoyable and fulfilling. Also known as a supplemental needs trust, this kind of trust may be a necessary part of your Illinois estate plan. An experienced estate planning attorney can help you draft this essential legal document to protect your family member.

Protecting Your Loved One

According to Illinois law, two types of supplemental needs trusts can be established: third party supplemental needs trusts and supplemental needs payback trusts. Both trusts provide the disabled beneficiary with the ability to improve his or her quality of life through services or assistive equipment that he or she would not receive with government assistance programs.

  • Third-Party Supplemental Needs Trust: This document is a trust for the benefit of someone who has a disability that “substantially impairs” his or her ability to care for himself or herself. The designated person is not “liable to pay or reimburse” a public or state agency for financial relief or services that he or she may have received. It is important to note, however, that the statute stipulates that the trust is discretionary, meaning the trustee determines how the monetary funds are spent, and the disabled person is not allowed control over the property and/or the income.
  • Supplemental Needs Payback Trust: In this type of trust, a disabled beneficiary is still eligible for Social Security and Medicaid benefits, but the beneficiary’s property can fund the trust without altering his or her benefit status. Basically, this means that if the disabled individual dies, any property left in the special needs payback trust must first reimburse Federal and State expenditures before being distributed to the beneficiary named in the trust.

Public assistance programs established for those individuals with special needs have certain income and asset restrictions. However, money put in the special needs trusts does not count toward the qualification for public assistance, as long as the funds are not used for food or shelter. Instead, the proceeds from this type of trust are generally used for medical bills, caretaker, and transportation costs, in addition to other relevant expenses.

It is crucial that the individual who creates the trust clearly explains the terms and directives of trust to ensure it is valid. A special needs trust must be established before the beneficiary reaches the age of 65.

Contact a Wheaton, IL Estate Planning Attorney

Planning for the future can help alleviate stress and disputes down the road. Creating a special needs trust that will continue to provide for your disabled family member is an important undertaking. A knowledgeable DuPage County estate planning lawyer At Stock, Carlson & Duff LLC, we are well-versed in Illinois law and prepared to assist you so you do not have to worry about your loved one’s future. Call us today at 630-665-2500 to schedule a private consultation and learn how we can meet your family’s personal needs.

 

Source:
https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K513.5

How a Special Needs Trust Can Benefit You and Your Family

special needs, DuPage County estate planning attorneysIt can be terribly challenging to plan for a time when you are not around to care for your loved ones. However, facing this reality by making an estate plan is one of the most selfless actions you can take. This is an especially true if you have a child, sibling, or other close loved one who has a serious disability. If you have been responsible for caring for a loved one who cannot care for himself or herself, you may want to find a way of providing for him or her after you pass away. One way to do just this is through an estate planning tool called a special needs trust.

Planning for the Care of a Loved One with Special Needs

A special needs trust or supplemental needs trust is an estate planning instrument that can be critically important to individuals who have a disabled loved one in their care. This instrument works by allowing the caregiver to place funds in the trust, which can then be used for the future care of their disabled loved one. A special needs trust allows you to put aside money for your loved one without affecting the disabled person’s eligibility for government assistance programs. Special needs trusts can be funded through gifts and inheritances or a lump-sum settlement. Without a special needs trust, money left to your loved one could potential disqualify him or her for certain government aid programs.

Leaving Money to a Loved One Could Increase His or Her Available Assets Too Much

The majority of government-funded aid is distributed to individuals under a certain income level. For example, Medicaid, Supplemental Security Income, and housing subsidies all have income criteria that a person must meet in order to qualify for the financial assistance. If you leave money to your disabled loved one without the appropriate estate planning instrument, it could be counted toward his or her available assets. If the funds are substantial, this money could bump your loved one’s income up to a level which makes him or her ineligible for programs with income or asset limits.

A properly-drafted special needs trust helps you ensure that your disabled loved one will receive the funds he or she needs in a way that does not jeopardize participation in other government assistance programs. Ideally, a special needs trust will help your disabled family member enjoy a high quality of life even after you have passed away.

Contact a Wheaton, Illinois Estate Planning Attorney for Help

Drafting a special needs trust or other estate planning instrument can be quite complex. For quality legal assistance from a knowledgeable DuPage County estate planning lawyer, contact Stock, Carlson & Duff LLC. Schedule a consultation by calling 630-665-2500 today.

 

Sources:

http://www.americanbar.org/content/dam/aba/publishing/rpte_ereport/te_lewis.authcheckdam.pdf

http://www.americanbar.org/newsletter/publications/law_trends_news_practice_area_e_newsletter_home/0501_estate_financialplanning.html

Establishing Trust Funds for Special Needs Children in Illinois

special needs children, Illinois Special Needs Trust AttorneySpecial needs children often require expensive care and treatment, and parents may worry about who will care for their children in the event of an untimely death. Parents may even seek counsel from estate planning attorneys to determine their options and gain information regarding trusts for their children with special needs.

Special Needs Trusts — The Basics

Special needs trusts are established so that parents with special needs children can put money aside to be used for a child's care at a later date. Any funds in the trust are protected and will not impact the amount of money a disabled child or person receives from other sources such social security. Even though there may be thousands of dollars in a trust fund, the individual will still retain all rights to Medicaid for health insurance benefits.

Special Needs Trusts — Financial Security

If a trust fund is not set up in the name of a special needs individual, any monies that person receives can impact social security and Medicaid eligibility. In Illinois, a disabled person cannot have an income more than three times over the poverty level, or receive more than $2,000, and still receive supplemental security income or government health benefits. Once access to these resources has been cut off, an individual would have to re-apply to all programs and prove that he or she has no additional financial resources, therefore causing potential financial hardship. This problem can be eliminated by having a special needs trust fund set up in the individual's name.

Special Needs Trusts — Provisions

Individuals who are guardians of a child or children with special needs should consider making provisions for a supplemental needs trust in their wills. This will entitle a special needs individual to adequate financial provision upon the death of his or her caretaker. There are also options for setting up and paying into a special needs trust while a guardian is still living. If done properly, this will not affect a disabled individual's eligibility for government assistance.

A third option is to set up a special needs trust to hold significant amounts of money granted to the special needs child—inheritance paid out from the death of another relative, for example. This money can go into a trust that has been certified by a public court to ensure the special needs individual will still qualify for his or her other benefits.

For more information about how to establish a special needs trust for your child, please contact a DuPage County special needs trust attorney today to schedule a consultation. We are proud to be of service to Illinois families and we look forward to working with you.