Part 1 in a 2-Part Series
Children bless us. From the day you or your wife gives birth, you start planning for your children’s future. You wonder about their interests, occupation and future spouse. These issues concern families most of the time. What’s more, they emerge as even more important in uncertainty, such as with the coronavirus pandemic. This week, we start a two-week series. We will cover how to help provide a prosperous future for your child or grandchild, no matter the environment. Take the following steps to protect a beneficiary:
Prepare a Special/Supplemental Needs Trust
First, establish a special- or supplemental- needs trust (SNT) for the benefit of your child or grandchild. An SNT sets aside money and property for the benefit of a beneficiary. Your heir may qualify for public assistance for medical and other care expenses as a result of disabilities. Ask your estate planning attorney to add SNT to an existing trust, or draft it as a standalone trust.
Maximize Beneficiary Payouts
Most government programs providing aid to disabled individuals observe strict requirements. These explain what money and property a person owns. Also, it indicates the amount of money they receive on a regular basis. Structure the inheritance your beneficiary receives so as not to disqualify them from receiving the government benefits. Does your child or grandchild currently receive government benefits? This does not mean that they will never receive them. When planning for their future, make sure to maximize opportunities available to them. Do not limit those opportunities. To accomplish this, draft the trust with an attorney who understands the eligibility requirements for government benefits.
Arrange Beneficiary Care
In addition to providing for your child’s or grandchild’s financial future, an SNT allows you to appoint a care manager or an advisory committee. As opposed to a trustee, whose job is to manage the money and property in the trust and make distributions, the care manager acts as your child’s or grandchild’s advocate. Depending upon the level of care your child or grandchild needs, the care manager may only need to check on them periodically or may be responsible for their day-to-day care. For those needing more assistance, the care manager may also serve as part of an advisory committee made up of multiple friends, family, and/or professionals. As an advocate, the care manager or advisory committee can advise the trustee about the beneficiary’s needs and the best ways to use the funds.
Beneficiary Safety Net
Within the SNT, a statement of intent can be included to instruct the trustee, and if necessary, the court, as to why the trust was established and how the money and property should be used. Although your intentions may seem obvious, including this section in the SNT can act as a safety net should there be a change in the law causing the special needs beneficiary to become ineligible for government benefits. If you include a statement of intent, it can be easier to change the trust to ensure that your original objective is carried out after you have passed away in the event of unforeseen changes.
Check back next week, when we will conclude this two-part series.
About Skvarna Law in Glendora & Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes several cities — Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
