Planning an estate is already a challenging task which can be complicated in many situations. However, when one has a person who is handicapped or has some other type of special needs depending on one for financial support, planning an estate can be even more important in Maryland or in any other state. This will require one ensures that the dependent person will receive support through the estate administration process when the time arrives.
One way to ensure a special needs person is taken care of is through a special needs trust which enables one to leave funds designated to provide care for the loved one. This type of trust is advantageous because it enables the funds to not be counted against Supplemental Security Income as well as thresholds for Medicaid benefits. This is possible since the beneficiary, the special needs individual, does not own the assets within the trust.
Most people use a testamentary or third-party trust to ensure their loved one with special needs is taken care of. This type of trust is created without any funding immediately required. Another option is a first-party special needs trust, otherwise known as a self-settled trust. This trust is funded with one’s own assets and money, however if the dependent person happens to die while assets are still held in the trust, the government may be able to seize the assets remaining in the trust.
Ultimately choosing the type of special needs trust to utilize will depend on each person’s specific situation and circumstances in Maryland or elsewhere. It is best to have a good understanding of estate planning laws as well as how to apply them to specific situations. This will also help with drafting the actual legal document in order to make it legally enforceable during the estate administration process.
Source: fiscaltimes.com, “Estate Planning Guide for a Special Needs Child,” Sonya Stinson, July 10, 2013
