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Supplemental Needs Trusts and disabled beneficiaries

Lucere Legal helps families with supplemental needs planning for disabled family members

Third-party Special Needs Trusts, called Supplemental Needs Trusts in Minnesota, are set up so that a disabled person can enjoy a better quality of life while still remaining eligible for means tested government programs on which they rely for housing, medical care, and other services. In many cases, these services aren’t available in the private sector, or sometimes the private sector services are vastly inferior while being shockingly expensive.

It is imperative that family members and well-meaning friends not give or bequeath anything of value to a disabled person receiving these benefits directly, but instead to name the trustee of the supplemental needs trust as the beneficiary. If the disabled person receives gifts or inheritances directly, they will then be ineligible for the services upon which they depend until they have spent-down their assets back down to the level for them to qualify for the government based programs. Not only will they be booted off the program that provides them with critical services, they will have to reapply and reprove their eligibility to get back on. For many, this is quite a burden and can leave the person in an uncertain state while the last of their private money is running out, but before the government is done processing the application for benefits.

It is very important for family members that the disabled person may inherit from designate the trustee of the special needs trust in all estate plans, life insurance beneficiary designations, and retirement or pension beneficiary designations. If a family member of the disabled person dies without a will, the probate court will have no discretion or authority to distribute the inheritance to the trustee, so it is crucial that all family members get their estate plans in order.

The nice thing about the supplemental needs trust is that it is there to provide just that – supplemental things – that the disabled person would not otherwise have access to. These things could be things needed for higher education or hobbies, or experiences like travel or theater tickets. The disabled beneficiary will have a much better life because of the supplemental needs trust planning that goes way beyond just keeping the government based services.

If you have a disabled loved one in your family and you want to make sure their government based services are protected, not to mention giving them a great life, call us at (612) 206-3701 or fill out our contact form today to set up a supplemental needs estate planning consultation.

Contact us to see how we can help you with Special Needs Trusts

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The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

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