If you have someone in your family who is currently disabled, you need to plan right away. Imagine if you and your spouse were involved in a horrible accident, with the kids in the car, but you both pass away… What will happen to the kids? While the kids survive the accident mostly unscathed, one of your children could become disabled from a head injury. If they are disabled, they will need help managing money. We would need somebody with professional management skills to help them manage money.
Disabled people also need government assistance with SSI benefits, Medicaid benefits and free health care. To be eligible for some of these benefits, they cannot have a lot of money. It is therefore important to plan for the potentially disabled people, even if they are not currently disabled.
What You Need To Do
You can provide for a disabled family member, but you need to do it in a trust that doesn’t disrupt their access to housing, medical and healthcare benefits or income. We suggest using a special needs trust, because if they are listed as a beneficiary, that person may lose their health care benefit if they inherit a lot of money, and this would be disastrous.
Another issue that we plan for in our office frequently, is when a couple are wanting to leave money to their child. They are concerned that in the event their child goes through a divorce, they would lose their life savings to a poor marital decision. This is another reason why relying too heavily on beneficiary designations is a mistake. With a beneficiary designation, the money goes to their child. However, if the child gets divorced years later, it could result in the inheritance being lost, because the money may get mixed up with the spouse’s money.
With a lot of our plans, we don’t give the kid an outright inheritance. Instead, we give the kid an inheritance in their own trust, and it never becomes a marital asset. In doing so, we’ve protected the children from their potential future issues, like divorces and losses. Estate planning wrestles with the fact that life is complicated, so we must manage control and access. We must decide who’s in control of the money and who can make the decisions regarding the money. By using proper estate planning documents, we can manage control and access. This will allow us to handle some of the biggest concerns and any eventuality.
You are welcome to download our FREE Pdf to learn about Estate Planning Mistakes you want to avoid. Click HERE to download.
You can also read other blog articles about Beneficiary Designations and what to be aware of. You might be interested in reading the blog… “https://sechlerlawfirm.com/articles-should-i-have-a-will-and-beneficiary-designations/“
