Those with special needs often qualify for government benefits. These benefits can be used to help cover the costs of housing, medical care and other baseline needs, something that is especially important after the death of their parents.

Examples of some of the benefits a person may use include:

  • Subsidized housing
  • Medicaid and Medi-Cal
  • Vocational rehabilitation
  • Supplemental Security Income (SSI)

One of the most common mistakes that parents make is leaving assets directly to an heir with special needs. When they do so, the heir’s assets increase substantially and suddenly they no longer qualify for these needs-based programs. After the heir spends through the inherited assets they may qualify again, but this can take time and quickly burns through the assets their parents intended them to have.

To avoid this outcome parents sometimes utilize a special needs trust instead. Assets can be moved into that special needs trust and the trustee, not the heir, controls that money. As a result, the heir still qualifies for needs-based programs and the government supplemental assistance they need. The heir will not jeopardize their benefits and their parents’ inheritance doesn’t get spent down in a matter of months or years.

An individual with special needs may already need a guardian, conservator, or someone else to help handle their affairs. You can think of setting up a special needs trust as another step in this process. The key is to make certain you understand and explore all available options, and that you consider all ramifications of any proposed plan. With carefully planning, almost anything is possible. Don’t overlook this powerful tool that can significantly help your special needs heir.