• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Nirenstein, Horowitz & Associates P.C.

Estate Planning | Making a Difference One Family at a Time

An Estate Planning Law Firm
Making a Difference One Family at a Time

Call Now: (860) 548-1000

Attend a Complimentary Seminar
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • RSS
  • Twitter
  • YouTube
  • Home
  • Our Firm
    • About Our Firm
    • Careers
    • Client Testimonials
    • Meet Our Team
  • Services
    • Asset Protection & Business Planning
    • Estate And Gift Tax Figures
    • Estate Planning
    • LGBTQ Estate Planning
    • Loss of a Loved One
    • Pet Planning
    • Powers of Attorney
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
  • Elder Law
    • Alzheimer’s Disease
    • Caregiver Information
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
  • Resources
    • Complimentary Estate Planning Worksheet
    • Complimentary Medicaid/Long-Term Care Calculator
    • DocuBank
    • Elder Law Resources
      • Glastonbury Elder Law Resources
    • Estate Planning Articles
    • Estate Planning Checkup
    • Estate Planning Definitions
    • Estate Planning Presentations
    • Estate Planning Seminars
    • Estate Planning Techniques
    • Frequently Asked Questions
      • Asset Protection and Business Planning
      • Elder Law & Medicaid
      • Estate Administration
      • Estate and Gift Tax
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • In-Home Elder Care
      • Irrevocable Trusts
      • LGBTQ Estate Planning
      • Living Trust
      • Medicaid Planning
      • Nursing Home Asset Protection FAQs
      • Probate
      • Probate Avoidance
      • SECURE Act 2.0
      • Trust Administration
      • Wills
    • Newsletters
    • Probate Resources
      • Probate Resources
    • Published Books
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
  • Seminars
  • Communities We Serve
    • Fairfield County
      • Darien
      • Fairfield
      • Stamford
    • Hartford County
      • Avon
      • Hartford
      • Simsbury
      • West Hartford
    • Litchfield County
      • Watertown
    • Middlesex County
      • Middletown
      • Old Saybrook
    • New Haven County
      • Middlebury
      • New Haven
    • New London County
      • Groton
      • Old Lyme
      • Stonington
    • Tolland County
      • Mansfield
    • Windham County
      • Woodstock
  • REVIEW US
  • Blog
  • Contact Us
Home » Special Needs Planning » Act Wisely to Provide for a Loved One With a Disability

Act Wisely to Provide for a Loved One With a Disability

March 22, 2022 by Barry D. Horowitz, Estate Planning Attorney

supplemental needs trustGenerally speaking, a person that receives an inheritance will mourn the deceased, but they will be able to put the windfall to good use. From a financial perspective, there will be no downside.

However, sometimes an inheritance can cause problems, and we will look at a relatively common scenario in this post.

Government Benefit Eligibility

Clearly, people with disabilities need health insurance more than most. Many of these folks cannot work, so they can’t get health insurance coverage through their employers. Medicaid is available to people with financial need, so this is the widely embraced solution.

Supplemental Security Income (SSI) is a source of income for people with disabilities that do not qualify for Social Security Disability Insurance (SSDI) benefits. The SSI payouts are modest, but any income is better than no income at all.

If you leave someone with a disability a direct inheritance through the terms of a will, their financial profile will change. The asset limit for Medicaid is just $2000, so they would no longer be eligible. Clearly, this is not the best way to provide for someone that is in this position.

Supplemental Needs Trust

You can make a loved one much more comfortable without jeopardizing the benefits if you make them the beneficiary of a supplemental needs or special needs trust. When you establish and fund the trust, you name a trustee to act as the administrator.

Any adult that is willing to assume the role can technically act as the trustee, but there is another option. You could engage a trust company, the trust department of a bank, or another professional fiduciary to serve as the administrator of the trust.

If you use a qualified trustee, they will understand the rules that govern these programs as they apply to supplemental needs trusts. There would be no longevity concerns or conflicts of interest, and the assets would be handled by a financial planning professional.

The beneficiary would not directly access assets in the trust, but the trustee would be able to use them to make purchases. Direct cash payments for food and shelter are not allowed, but everything else is fair game, including things that would be defined as luxuries.

Even if resources in the trust are used to pay for food or shelter, eligibility would not be completely lost. The SSI benefit would be reduced, and the amount would depend on the extent of the expenditures.

Medicaid Estate Recovery

There is the matter of assets that remain in the trust after the death of the beneficiary. The legislature put the parameters in place, and under these guidelines, there is a Medicaid estate recovery phase. After the death of the beneficiary, the program must seek reimbursement from their estate.

Since you cannot qualify for Medicaid if you have more than $2000 in countable assets in your name, there is usually nothing remaining for them to take. Of course, the dynamic is different if a special needs trust has been established and there are assets remaining in the trust.

If you establish a special needs trust with your funds for the benefit of someone else, it would be looked upon as a third-party trust. The beneficiary never actually owned the assets, so they would not be part of their estate. After their passing, the remainder would go to a successor trustee that you name in the trust declaration.

Assets that are the property of someone with a disability could be used to fund a supplemental needs trust. The trustee could make the same types of approved expenditures without impacting benefit eligibility. However, the assets that remain in the trust after the beneficiary’s death would be available to Medicaid during recovery efforts.

Take Action Today!

As you can see, there are targeted solutions that can be implemented to facilitate effective asset transfers. The ideal way to proceed will depend on the circumstances, and this is what you should work with an attorney to develop a custom crafted plan.

If you are ready to get started, you can schedule a consultation at our Glastonbury or Westport, CT estate planning offices if you call us at 860-548-1000. There is also a contact form on this site you can fill out if you would prefer to send us a message.

 

  • Author
  • Recent Posts
Barry D. Horowitz, Estate Planning Attorney
Barry D. Horowitz, Estate Planning Attorney
Founding Partner and President at Nirenstein, Horowitz & Associates PC
Barry D. Horowitz is a founding partner and president of the law firm of Nirenstein, Horowitz & Associates, P.C. He received his diploma from the Loomis Chaffee School and his Bachelor of Arts from Bennington College, where he dual majored in philosophy and music.

Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.

After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.

Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.

Mr. Horowitz was selected for Super Lawyers in 2021.
Barry D. Horowitz, Estate Planning Attorney
Latest posts by Barry D. Horowitz, Estate Planning Attorney (see all)
  • Take Precautions to Protect Your Legacy - September 12, 2023
  • Regular Reviews and Updates of Your Estate Plan Are Essential - August 24, 2023
  • Estate Planning Tips to Help You Protect Your Family - August 8, 2023
Share our Content:

Filed Under: Special Needs Planning Tagged With: Medicaid estate recovery, Special Needs Planning, supplemental needs trust

Other Articles You May Find Useful

Supplemental Needs Trust 1 150x150
Is There a Person With Special Needs on Your Inheritance List?
special needs planning
How Can You Include a Person With a Disability in Your Estate Plan?
special needs planning
Special Needs Planning Questions Answered
special needs trust
Does Medicaid Seize Remaining Assets in a Special Needs Trust?
supplemental needs trust
SSI vs. SSDI: Are There Any Differences?
supplemental needs trust 1
What Is a Supplemental Needs Trust?

Primary Sidebar

Nirenstein, Horowitz & Associates

Upcoming Seminars

Estate Planning Seminar

Date: September 26

Venue: The Carousel Museum, 95 Riverside Avenue, Bristol, CT, 06010, United States

Estate Planning Seminar

Date: October 17

Venue: Canton Community Center, 40 Dyer Avenue, Collinsville, CT, 06019, United States

See all Seminars

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

TESTIMONIALS

Blog Subscription

Our blog gives you the most up-to-date estate planning news. Sign up today to receive our regular updates!

  • This field is for validation purposes and should be left unchanged.

WESTPORT OFFICE

8 Wright Street, Suite 107
Westport, CT 06880
Phone: (860) 548-1000
Fax: (860) 761-1070
preserveyourestate_sidbr_map

Somerset Square

200 Glastonbury Boulevard, Suite 202
Glastonbury, CT 06033-4418
Phone: (860) 548-1000
Fax: (860) 761-1070
preserveyourestate_sidbr1_map

Office Hours

Monday8:30 AM - 5:00 PM
Tuesday8:30 AM - 5:00 PM
Wednesday8:30 AM - 5:00 PM
Thursday8:30 AM - 5:00 PM
Friday8:30 AM - 5:00 PM

Footer

footer-logo
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc.