Although much of estate planning focuses on the distribution of assets upon an individual’s death, part of that process is learning how best to protect those assets during an individual’s life so that they can actually be passed down to heirs and beneficiaries. One threat to an estate’s financial health is long-term care. The costs associated with long-term care can be exorbitant, leaving an estate severely damaged.
However, there are ways to engage in estate planning that seeks to reduce or even eliminate the damage caused by the need for long-term care. One step an individual can take to address this matter is piece together funding to satisfy the potential for any long-term care needs. Medicaid can help alleviate the financial burden associated with long-term care, but many individuals don’t qualify to receive these benefits because their income is too high or their assets are too great. The same can hold true when assets are left to an individual who is currently receiving government benefits. Such an inheritance, if not handled properly, can suddenly render an individual disqualified from receiving the benefits he or she depended upon.
By utilizing a special needs trust, though, an individual can essentially reduce countable income for Medicaid determination purposes. These trusts are made specifically to benefit those individuals who suffer from physical or mental disabilities and are unable to manage their own finances. A trustee is either named or appointed to handles the trust’s assets for the benefit of the named beneficiary, so that individual must be chosen carefully with a firm understanding of the duties involved.
Hopefully, with a special needs trust in place and access to government benefits an individual can afford the medical care he or she needs. To learn more about how to engage in estate planning in a way that protects other benefits, interested individuals should speak to an attorney they trust.