Estate Planning When You Have A Disabled Adult Child

 Posted on March 23, 2023 in Estate Planning

Yorkville Special Needs Estate Planning Attorney

Estate planning for parents of a minor or adult disabled child who receive government aid programs must consider designing an estate plan with their disabled adult in mind. Special needs trusts are a type of trust aimed at distributing one's assets, such as life insurance, real estate, retirement assets, bank accounts, and other accounts, smoothly and efficiently. 

Special Needs Trust and Planning

Working with an estate planning lawyer is essential because a special needs estate planning lawyer will assist you in anticipating family conflicts and problems before they arise. Family conflicts arise upon one's death often because family conflicts are not considered, such as an adult disabled child receiving an inheritance, which will disqualify them from receiving their government aid benefits, such as social security disability income.

Social Security Disability Income

The Social Security Administration administers two types of disability programs. The first category of disability program is called "Social Security Disability Insurance or "SSDI." SSDI is designed for disabled individuals who have worked sufficient periods and are paid into the social security system. This type of disabled adult receives insurance and is not a needs-based system. For example, a disabled adult receiving an inheritance will not be disqualified because their disability benefits are not needs-based.

Supplemental Security Income

The second type of program is called Supplemental Security Income or "SSI." SSI is a needs-based program providing disabled adults with social security disability income, which is a needs-based program. SSI is designed for disabled adults who have not worked enough time to qualify for the insurance-based social security disability program. An adult disabled adult that receives SSI will be disqualified from government benefits due to their inheritance.

Third-Party Supplemental Needs Trust 

A Third-Party Supplemental Needs Trust is also known as a "Third-Party Special Needs Trust" because it is funded with assets belonging to a third-party such as a parent, sibling, or grandparent. The purpose of the Third-Party Special Needs Trust is to distribute assets to disabled adults in a manner that will maintain their eligibility for government benefits, known as SSI. This type of trust differs from a Special Needs Trust established by a disabled adult because it does not have a "payback" provision. The payback provision means that the Special Needs Trust must pay back the government for benefits that they paid out. On the contrary, a Third-Party Special Needs Trust differs because it is set up by a person other than the disabled adult and has a feature that allows the remaining assets in the Special Needs Trust to be distributed to residuary beneficiaries or other family members or legatees.

Oswego Special Needs Trust Lawyer: Serving Special Needs Family With Estate Planning in Kendall County & Nearby Areas

Peace of Mind Asset Protection, LLC is an estate planning law firm specializing in trust and special needs estate planning. The estate planning attorneys and staff are experienced at working with families with their estate plans, which strategize to protect their loved one's assets in case of death or incapacity. Whether you need a living trust or special needs trust or have questions about estate planning in the Yorkville, Plano, Oswego, and Plainfield areas, contact a Special Needs Attorney at Peace of Mind Asset Protection, LLC at 630-882-2467 or via the online contact form.