Many people put off estate planning. In fact, the majority of Americans have yet to craft their own estate plans. Many of them say they will do it in the future. The issue isn’t that they do not want an estate plan, but just that they are procrastinating.
This is a risk in any situation, but it is especially concerning if you have a beneficiary with special needs. These needs can be addressed in your estate plan. Procrastinating this process is an extreme risk because you could pass away unexpectedly, and that could have major unintended consequences for the beneficiary.
Protecting their right to benefits
For example, an estate plan may use a special needs trust. This can hold assets for your beneficiary, but they do not technically own those assets. As such, they can often still qualify for the government benefits that they need based on their disability.
But if you don’t set up a trust or any other estate planning tools, they may just inherit your money directly. This could disqualify them from the benefits that they are already receiving. They may be required to spend down the assets before they can reapply. In other words, their goal becomes trying to get rid of the inheritance that you just left them, rather than benefiting from it. Only once they have spent all of the money that you provided can they reapply and get the benefits they need.
You can see how problematic this would be, but advance planning can help you avoid it. Just make sure you know what steps to take.
