Do You Need A Contingent Special Needs Trust?
With the proliferation of government assistance programs, many bequests designed by loving parents or grandparents to help their heirs’ quality of life ironically have the reverse effect by disqualifying them from government assistance programs. For example, Supplemental Security Income (commonly known as “SSI”) and Medical Assistance have strict qualification standards, which frequently permit its recipients to possess no more than $2000 in countable resources. Over the passage of time following a Will‘s initial execution, the life circumstances of an individual‘s descendants/heirs can change dramatically.
Accordingly, outright bequests to heirs receiving government assistance can have the ironic effect of disqualifying them from benefits which, in some cases, took several years and several appeals to obtain. After being disqualified (because of an outright bequest under a Last Will and Testament), the individual must deplete his or her newly–received inheritance below the countable resource threshold before s/he becomes eligible for the resumption of government assistance.
In many unfortunate cases, the individual does not receive acceptance of his/her application for the resumption of government benefits immediately, and can face extreme hardship, and even homelessness, while the onerous application process is repeated following the depletion of the inheritance. Furthermore, the testator‘s hard–earned life savings is, in essence, unnecessarily returned to the State and/or Federal Government, instead of benefiting the heir/descendant as originally intended under the Last Will and Testament.
To avoid this increasingly–common unintended effect, we recommend that all our clients include contingent Special Needs Trust Provisions in their Last Will and Testament. In the event that their heirs remain healthy, the contingent Special Needs Trust Provision does not become effective, and the bequest will pass directly to their loved ones in the ordinary manner through the estate administration/probate process. In the event, however, that their loved one has qualified for government assistance in the interim since the Will was originally executed, the bequest will be placed into a Special Needs Trust, which will then be used to supplement the heir‘s quality of life without disqualifying them from government assistance.
Scott and Scott, P.A., Provides Seasoned Counsel And Legal Services