Planning for the future of a loved one with a disability is an important, and often overwhelming, task. Special Needs Trusts (SNTs) can be invaluable in securing the long-term financial well-being of your family members while ensuring that they retain access to essential public benefits. However, several myths and misconceptions that surround establishing at Trust cause families to overlook or not consider this crucial safety net. Let’s explore and debunk some of these myths.
Special Needs Trusts Are Only For The Wealthy:
One of the most prevalent misconceptions is that Special Needs Trusts are only necessary for families with significant wealth.
FACT:
Even modest inheritances or gifts can jeopardize a person’s access to essential public benefits like Medicaid and Supplemental Security Income (SSI). In fact, an inheritance of as little as $2,000 could disqualify an individual from receiving public benefits. A Special Needs Trust safeguards these assets while ensuring the beneficiary remains eligible for public assistance. It’s a sensible solution for families of all income levels, not just the wealthy.
Special Needs Trusts Are Too Expensive:
Another common myth is that Special Needs Trusts are prohibitively expensive to set up and maintain.
FACT:
While any investment in future planning comes with costs, Special Needs Trusts provide a level of security and peace of mind that is invaluable. The lower opening fees of organizations like MSNT make trusts accessible, with some trusts costing as little as $200 to establish. Additionally, the monthly fees are often based on the balance of the trust, keeping ongoing costs manageable.
When considering the financial protection and assurance that your loved one will maintain access to vital public benefits, a Special Needs Trust is a small price to pay for peace of mind.
We Already Have a Will, So We Don’t Need a Trust:
Many families assume that a Will is all they need to provide for their loved one after they pass, and therefore see no reason to set up a Special Needs Trust.
FACT:
While a Will is important, it only comes into effect after someone passes away. It does not ensure continuity of care if a parent or caregiver becomes incapacitated. In addition, disbursements from a Will can potentially disrupt a beneficiary’s public benefits. A Special Needs Trust, on the other hand, allows for distributions that won’t interfere with public benefits. Furthermore, a Trust doesn’t have to go through probate, unlike a Will, which can lead to delays and added costs.
Our Family Will Take Care of Our Loved One:
It’s comforting to assume that family members will step in to handle financial and caregiving responsibilities after you’re gone. However, this assumption may not always be realistic.
FACT:
While many families want to help, not all family members may have the time, capacity, or expertise to manage a Special Needs Trust effectively. Overseeing the distribution of assets requires knowledge of public benefit programs, laws, and regulations. Family members may not be familiar with these, and they may not fully align with your intentions or wishes regarding the care of your loved one.
Organizations like Midwest Special Needs Trust (MSNT) provide professional trustee services, offering an objective, third-party perspective. This professional oversight not only ensures that funds are managed correctly but also adds a layer of protection from exploitation, mismanagement, and even abuse. Entrusting a non-profit organization like MSNT to oversee a Special Needs Trust provides your family with peace of mind, knowing that your loved one is cared for by experts who understand the legal and financial complexities involved.
Special Needs Trusts offer families an invaluable resource for protecting a loved one’s future, regardless of income level. By debunking these common myths, more families can feel empowered to take advantage of the benefits a Special Needs Trust offers. From ensuring continuity of care to safeguarding access to public benefits, establishing a Special Needs Trust is a thoughtful, proactive way to provide for a loved one with a disability.
Â
It’s never too early to start planning—because your peace of mind and your loved one’s future security are truly priceless. Start today – contact Midwest Special Needs Trust to set up a free consultation, www.midwestspecialneedstrust.org or email: mftbt@midwestspecialneed.org.