Balancing Benefits and Lifetime Value for Clients with Special Needs

Special Needs Trusts are the typically thought of as the best method for receiving money for individuals with disabilities. However, qualified professionals should take the time to analyze the advantages and disadvantages of Special Needs Trusts as they pertain to their client’s individual cases. A proper analysis should take into consideration the related costs pertaining to trusts or other savings methods as well as the benefits the client is eligible for, both currently and in the future. The benefits received by individuals with disabilities typically fall into two categories: means-tested and non-means-tested. Means-tested benefits are determined by state and federal government entities and include programs such as Medicaid, Supplemental Security Income, and Veterans Aid and Assistance. These programs take into consideration an individual’s income and savings among other stipulations to determine benefit eligibility. Non-means-tested benefits are different in that they usually do not take into consideration things like savings. Some examples of these types of benefits include Medicare and Special Education programs. With these eligibilities in mind, professionals and their clients can make an informed decision about whether to use a Special Needs Trust or to choose another savings option. Alternatives to a Special Needs Trust can vary widely from a Settlement Protection Trust to establishing an ABLE account to accept funds. Depending on the amount of funds being received into these accounts it may cause the loss of means-tested public benefits. For this reason, professionals should run a robust cost-benefit analysis of a Special Needs Trust. While a Special Needs Trust will protect many means-tested benefits for the beneficiary, the overall cost of establishing the trust and operation related fees should be weighed against the possibility of losing those benefits. When considering a Special Needs Trust both clients and professionals must tailor their approach to maximize the value created over the lifetime of the beneficiary.   For more information, please visit: https://www.begleylawgroup.com/2018/07/special-needs-trusts-a-cost-benefit-analysis/