The Blue Ash Medicaid attorneys at our firm always emphasize the importance of personalized attention, because there is no “standard” estate plan that is right for everyone. Your intentions and the nature of your resources will be part of the equation, and you also have to consider the life situation of the people that are on your inheritance list.
With this in mind, we will look at an estate planning technique that is ideal if you want to leave an inheritance to a loved one that is relying on Medicaid coverage as a source of health insurance.
People With Special Needs
Most Americans get their health insurance through their employers, but many individuals with special needs do not have the ability to enter the workforce. Many of these folks qualify for Medicaid coverage. This jointly administered federal/state government health insurance program is potentially available to people with or without disabilities that have less than $2000 in countable assets.
In addition to Medicaid, there is another government program that is relied upon by a significant percentage of people with special needs. Supplemental Security Income is more or less self-explanatory: it provides income for recipients that have no earning power because of their disabilities.
If you were to leave a significant direct inheritance to someone that is enrolled these programs, the improvement in financial status could result in a loss of benefit eligibility. Fortunately, there is a commonly embraced solution in the form of a legal device called a supplemental needs trust.
To execute this strategy, you establish and fund the trust, and you name a trustee to act as the administrator. It can be someone that you know personally, but you can alternately engage a professional fiduciary like a trust company or the trust department of a bank. The person that you want to assist would be the beneficiary.
Under the rules of these need-based programs, the trustee would be allowed to use assets in the trust to make the beneficiary more comfortable in numerous different ways. The trustee could use the funds pay for vacations, transportation, education, medical and dental procedures that are not covered by Medicaid, electronic equipment, musical instruments, and other goods and services.
Medicaid is required to seek reimbursement from assets that are part of the estates of recipients that pass away. When you establish and fund a trust for the benefit of someone else, it is considered to be a third-party special needs trust. Under these circumstances, the assets would be protected, and they would be transferred to a successor beneficiary after the death of the first beneficiary.
Download Our Special Report
We have taken a brief look at special needs planning in this blog post, but we have a more comprehensive resource that you can access on this website if you would like to learn more. Our Blue Ash Medicaid attorneys have compiled a library of special reports that cover many different important topics. One of them is dedicated to special needs planning and Medicaid preservation.
There is no charge at all to download this very informative report, so you have everything to gain and nothing to lose. To gain access to your copy, visit our report library, click on this particular report, and follow the simple instructions. Of course, if you would like to read any of the other reports, they are available to you as well.
Schedule a Consultation!
Written information is great, and you can definitely learn a lot if you take advantage of all the resources that we have here on this website. This being stated, there is no substitute for a direct, one-on-one consultation with a licensed attorney.
We would be more than glad to discuss special needs planning or any other facet of the estate planning process with you in person. We know that you discuss sensitive family and financial matters when you speak with an attorney, and we are very sensitive to this dynamic. You can rest assured that you will feel perfectly comfortable as soon as you walk through our doors.
You can send us a message if you would like to schedule a consultation appointment, and we can be reached by phone at 513-721-1513.