Special Needs Trusts: How Can They Help Your Loved Ones?

Ensuring that a child has a secure financial future is a big challenge all by itself. The issue is even scarier to think about when a child has special needs. In these cases, parents often wonder who will care for their child and how the child’s needs will be met after they’re not around anymore.

This is special needs planning: estate planning for individuals with special needs. For many families, this process often includes a Special Needs Trust (or SNT). A SNT is an important part of special needs planning, as it allows people to help set up funds to care for disabled loved one while also preserving their access to important government benefit programs like Medicaid or SSI.

The general structure of a SNT is this: A person wants to leave money for the care of a disabled person. Instead of simply leaving them a sum of money in their will, the person creates a SNT for the benefit of a disabled person. The person creating the trust is called the Grantor, and the disabled person is called the Beneficiary. The SNT also appoints one or more people to serve as Trustees. A Trustee is a person in charge of managing the SNT. Once the SNT is created and the Grantor funds it by placing assets (cash, property, etc.) into the SNT, the Trustee can then use the SNT’s assets to help pay for the Beneficiary’s needs. Most importantly, assets placed in the SNT are not counted as being owned by the Beneficiary, which means the SNT’s assets won’t disqualify them from receiving benefits like Medicaid or SSI.

The benefits of a SNT are numerous:

  • A person can leave funds to a special needs individual while still preserving that individual’s access to programs like Medicaid or SSI.
  • The SNT can pay for care and services above and beyond what government benefits pay for.
  • The funds in the SNT are protected from creditors, so if someone sues the Beneficiary of the SNT, any judgment resulting from the suit couldn’t touch the funds in the SNT.
  • A SNT ensures that the funds will be managed by a competent, responsible person (the Trustee) who will use the funds for the Beneficiary’s care; this is vitally important, as often special needs individuals wouldn’t be able to manage the money properly themselves, or could be influenced or taken advantage of by other people trying to con the special needs individual out of their money.

This is just a general description of SNTs; there are different types of SNTs that should be used in different situations, and each comes with their own pros and cons. If you have a special needs person in your life, we would be happy to sit down with you and discuss how special needs planning can help make sure that they’ll be taken care of, regardless of what the future may bring. Please call us at (850) 607-7890 or contact us via our website to schedule a consultation. We look forward to talking with you!

Dying Without a Will: Letting Tallahassee Decide Who Inherits from You

If you die without a will, then the law calls that dying “intestate” (as opposed to dying with a will, which is called “testate”). Many people don’t bother getting a will, because they figure it doesn’t matter: if they die, their spouse gets everything, and if their spouse has already died by that time, their kids get everything split equally. Easy, right?

Unfortunately, it’s not always that easy.

If you die intestate, then Florida’s intestate statutes (Chapter 732, if you’d like to look them up) dictate who inherits your probate assets. Here are the general rules:

 

  1. If the decedent (a/k/a the deceased person) did not leave behind any descendants (children, grandchildren, etc.), then their surviving spouse inherits everything. If the decedent was survived by descendants, but did not leave behind a spouse, then the inheritance is split equally between the descendants.
  2. If the decedent did leave behind descendants as well as a spouse, and those descendants are also the descendants of the surviving spouse, then the surviving spouse still inherits everything. For example, if a person dies and is survived by his wife and their two children, his wife inherits the entire estate.
  3. If the decedent did leave behind descendants as well as a spouse, and at least one of those descendants is not a descendant of the surviving spouse, then the surviving spouse inherits 50% and the other 50% is divided equally between the descendants who are not also descendants of the surviving spouse. For example, a person dies and is survived by her husband and three children. One of those children is also child of the surviving husband, but the other two children are the decedent’s children from a previous marriage (in other words, the surviving husband’s step-children). In this case, the surviving husband would inherit 50% of the estate, and the other two children (the step-children of the surviving husband) would split the other 50%, each winding up with 25% apiece.

As you might imagine, it’s Rule #3 that often winds up surprising people. Many folks assume that, upon their death, their spouse will inherit everything. However, if you leave behind children that are not your surviving spouse’s, then your spouse will only inherit 50% and the other 50% will go to those children. For people with children from different partners, this can obviously be a large issue, and one that almost no one sees coming until it’s too late.

One of the main reasons everyone should have a good estate plan is to make sure that, after your death, your assets go to exactly how you would like them to go. A will or trust can take care of this and spell it out in easy to understand language that your family can rely on. The intestate laws, however, can be confusing and can be changed anytime the state legislature decides to do so. I know I wouldn’t want to let the folks in Tallahassee decide who inherits from me. I wouldn’t recommend that you let them make that decision for you, either.

To learn more about how Medley Law Firm can work with you to ensure that your hard-earned assets are passed down exactly how you would like, please call us at (850) 607-7890 or contact us via our website to schedule a consultation.

Talking Turkey about Estate Planning

When families get together over Thanksgiving, there are some topics that seem to always come up in conversation: how someone’s job is going, whether cousin Frank is ever going to get married, and what your football team’s chances are in this year’s playoffs (for my Florida Gators, I’m not holding out much hope). However, there’s another topic that’s rarely brought up, but can be one of the most important conversations you ever have with your family: estate planning.

Yes, I know it’s awkward to think about: “Great turkey, mom! By the way, when was the last time you updated your power of attorney?” However, as TheStreet points out, with the family gathered together, Thanksgiving can be a perfect opportunity to bring up estate planning.

If you have been thinking about talking with your family about your estate planning intentions, having the discussion when most of the family members are in the same room is the best time to do it, as everyone can be sure that they’re all on the same page and understand what your wishes are.

However, a lot of families are hesitant to talk about this kind of thing, especially over the holidays; nobody wants to think about illness, incapacity or death during the most wonderful time of the year. Also, as busy as the holiday season can be, it’s easy to say

“We’ll worry about that after Christmas” and put off the conversation until later. The problem with that is that, once it’s put off until after the holidays, it’s easy to put it off again and again until it never winds up getting done.

So, if you think your parents or children might not want to have this talk, don’t surprise them by bringing it up in the middle of dinner. Instead, talk with them now and plan a family meeting while everyone’s together, so that they’ll have time to gather their thoughts and questions. They won’t have to put it off any longer, and can start working towards setting up a plan that will ensure that their loved ones and assets will be protected, regardless of what 2016 may bring.

This Thanksgiving, you can add “security and confidence about the future” to the list of things to be thankful for. All it takes it talking with the people you care about most.

To learn more about how Medley Law Firm can work with you to create a personalized estate plan that will help you achieve your goals, please call us at (850) 607-7890 or contact us via our website to schedule a consultation.

From our family to yours, may you have a happy and blessed Thanksgiving.