Estate planning comes with a unique set of challenges if one of your close family members is an individual with special needs. How do you make sure you help your loved one maintain a decent quality of life after you're gone?
The following overview will help you understand the basics of planning for special needs beneficiaries in Georgia.
Why Create a Special Needs Trust?
Using your will to pass assets to beneficiaries may seem like an obvious choice, but it's a big mistake if you have a family member with special needs. By leaving money and assets directly to your loved one, or even using tools like life insurance policies, you may harm their eligibility for government benefits like Medicaid, SSI, and SSDI.
Many government assistance programs include specific income and asset thresholds for applicants. If an applicant with special needs exceeds these thresholds, they may become ineligible for benefits or receive less assistance.
A third-party special needs trust also called a supplemental needs trust (SNT) bypasses this hurdle by holding assets for the benefit of the disabled person but putting them under the management of an independent trustee. The disabled individual never has direct access to trust funds, so these funds don't count as part of their personal assets or income. At the same time, the disabled beneficiary can enjoy the benefits of trust distributions that may fund medical care, education, therapy, travel, and other needs.
Types of Special Needs Trusts in Georgia
Georgia recognizes several types of SNTs, including:
- General Support Trust: General support trusts usually hold and manage high-value assets to provide for the overall needs of disabled individuals.
- Supplemental Care Trust: Supplemental care trusts provide for any needs of the disabled person that government benefits don't cover.
- Pooled Trust: Pooled trusts are systems that hold assets for many individuals with special needs under centralized management. This trust setup helps preserve eligibility for public benefits while cutting down on trust maintenance costs.
Requirements for Special Needs Trusts
Planning for special needs beneficiaries in Georgia involves understanding state requirements for SNTs. To be enforceable and avoid penalties, a special needs trust must comply with certain rules, such as:
- Trust funds must come from a third party, usually a parent or grandparent, and not from the beneficiary's assets.
- All trust distributions must go toward covering the needs of the disabled beneficiary.
- An independent trustee will make all decisions on asset management and distribution. The beneficiary cannot access or control trust assets.
- The trust should make payments directly to providers that supply goods or services to the disabled individual.
- The SNT should include spendthrift provisions to protect trust assets and proceeds from potential creditors.
(this is not a complete list of all applicable rules/regulations)
Secure Your Loved One's Future With the Right Special Needs Trust
Effective planning for special needs beneficiaries in Georgia requires careful strategy and a thorough knowledge of estate planning law. Contact Peach State Wills & Trusts for reliable legal guidance and support to provide for a loved one with special needs.
Call 678-551-7082 or fill out our online form to discuss your needs with a lawyer experienced with special needs planning in Lawrenceville, GA.