Disinheritance, while seemingly straightforward, often creates unintended consequences, and a special needs trust (SNT) generally offers a far more compassionate and legally sound solution for providing for a beneficiary with disabilities; approximately 61 million adults in the United States live with a disability, many of whom rely on government assistance programs like Supplemental Security Income (SSI) and Medicaid, and directly inheriting assets can disqualify them from these vital benefits.
What happens if my special needs child receives an inheritance directly?
Direct inheritance can create a significant problem for individuals receiving needs-based government benefits; if a beneficiary with a disability receives assets outright, those assets are counted towards the resource limit for SSI and Medicaid eligibility (currently $2,000 for SSI in 2024); exceeding this limit results in benefit suspension or termination, leaving the beneficiary without crucial support; for example, imagine Sarah, a young woman with Down syndrome, receives $50,000 from a grandparent’s estate; this immediately disqualifies her from SSI and Medicaid, eliminating her access to healthcare, housing assistance, and daily living support; this isn’t a hypothetical situation—many families face this challenge annually, often seeking emergency legal counsel to rectify the situation, which can be costly and emotionally draining.
Can a trust protect government benefits while still providing for my loved one?
A special needs trust, however, allows assets to be used for the *supplement* of the beneficiary’s care without impacting their eligibility for government assistance; the trust can cover expenses not covered by public benefits, such as therapy, recreation, travel, education, or other quality-of-life enhancements; there are two main types of SNTs: first-party (or self-settled) trusts, funded with the beneficiary’s own assets, and third-party trusts, funded by someone else; third-party SNTs are generally preferred as they offer greater flexibility and avoid Medicaid payback provisions; Steve Bliss, an estate planning attorney in Wildomar, often explains that a properly drafted SNT ensures the beneficiary maintains a secure and enriched life while remaining eligible for critical support. “The goal isn’t to replace government benefits, but to *enhance* the beneficiary’s life beyond what those benefits provide,” he emphasizes.
I’m considering disinheritance, what are the emotional and legal repercussions?
Disinheritance, while a legal option, carries significant emotional and potential legal repercussions; it can fracture family relationships, leading to resentment and legal challenges; a disinherited beneficiary may contest the will or trust, claiming undue influence, lack of capacity, or fraud, resulting in costly litigation and prolonged family disputes; it’s a course of action typically taken only when relationships are severely strained or the beneficiary is demonstrably unable to manage funds responsibly; I recall a case where a father, intending to teach his son a lesson, disinherited him in his will; the son, despite his initial anger, was devastated and filed a lengthy legal battle, draining the estate’s assets and causing immense emotional distress to all involved; the situation could have been handled with a carefully structured trust, ensuring the son received support while encouraging financial responsibility.
What if we set up a trust *after* an inheritance has already been received?
While establishing a trust *after* an inheritance is received is possible, it’s considerably more complex and may not fully mitigate the loss of benefits; the process often involves “gifting” the inherited assets to an irrevocable trust, which can trigger a five-year look-back period for Medicaid eligibility; any transfers made during this look-back period could result in a period of ineligibility for Medicaid; however, in one instance, I worked with a family whose daughter had unexpectedly inherited a substantial sum; they quickly sought legal counsel and established a first-party special needs trust, effectively preserving the funds for her long-term care; it required careful planning and documentation, but it allowed her to maintain her Medicaid eligibility and receive the supplemental support she needed; this highlights the importance of proactive planning and seeking expert legal guidance. A well-crafted special needs trust, particularly a third-party trust, is almost always a superior solution to disinheritance, offering a pathway to provide for a loved one with disabilities while safeguarding their access to essential government benefits and fostering a secure future.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What’s the best way to leave money to minor children?” Or “What is summary probate and when does it apply?” or “Can I be the trustee of my own living trust? and even: “What’s the process for filing Chapter 13 bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.