How Is Estate Planning Handled for People With Disabilities?

August 3, 2023
Contact Our West Chester Estate Lawyers at Eckell Sparks Today for Help With an Estate Plan

Estate planning involves managing an individual’s assets to ensure that these holdings get distributed according to their wishes in the event of death or incapacity. When a beneficiary is disabled, special considerations can go into the planning.

Money left in a will is not the only monetary award that can pose problems for people with disabilities; a personal injury settlement or other monetary award can also be an issue. These can disqualify a person with a disability from being eligible for government benefits like Medicaid and Social Security.

To remain eligible, a person with a disability cannot have countable assets exceeding $2,000. This can cause problems when inherited or awarded money runs out.

Creating an Estate Plan for a Beneficiary With a Disability

The first step in this process is to assess and understand the beneficiary’s needs:

  • The amount of assistance the beneficiary needs to perform everyday tasks.
  • The nature of the mental or physical disability.
  • The severity of the disability.
  • The type of future medical care required.

It is also essential to evaluate the government assistance the beneficiary is receiving now or may need going forward. The estate plan should also provide the right assets to meet their needs and be divided amongst other beneficiaries, especially siblings. Another goal can be to ensure that the other members are not overburdened with the beneficiary’s care.

How Does a Special Needs Trust Work?

This option protects the beneficiary’s eligibility for ongoing disability-related government benefits. It can be a testamentary special needs trust that goes into effect after the grantor dies or an inter-vivos, which is in effect during the grantor’s (person who funds the trust) lifetime. A chosen trustee manages the trust and must protect the beneficiary’s ability to get the benefits.

These are both types of discretionary trusts. The grantor transfers the assets to a trustee, a third party who holds them on the beneficiary’s behalf. The grantor gets to decide on the distribution terms, including specific conditions and times. Specifying terms for conservatorship or guardianship is also essential if the beneficiary is a child.

Individuals with disabilities can also benefit from an estate plan that prioritizes their current or future disability or incapacity. A well-designed plan will determine how assets will be managed. A durable power of attorney to manage finances, health care arrangements, or advance health care directives might be part of the estate plan.

Contact Our West Chester Estate Lawyers at Eckell Sparks Today for Help With an Estate Plan

A person with a disability may need to be well cared for throughout their life, and an estate plan can help. For more information, contact our West Chester estate lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. Call us at 610-565-3701 or contact us online to set up an initial consultation. Located in Media and West Chester, Pennsylvania, we serve clients in Delaware County, Chester County, and Montgomery County.