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The main benefit of a special needs trust

If you have an heir with special needs, you may consider setting up a special needs trust to help take care of them after you pass away. However, you may also wonder why you couldn't just leave the money directly to them. Why put it in a trust first?

The issue is that they may not qualify for government assistance. The qualifications are based in part on the assets the person has to cover costs on their own. This means that they would have to spend nearly all of what you left them in a will before they could get assistance again.

At that point, the government may give them access to things like Security Supplemental Income (SSI) and Medicaid. That said, as one expert pointed out, all the government funds really do is give the person financial aid so that they stay near or even "below the poverty line."

By putting the money in a trust instead, you make sure that they do not own those assets in a legal sense. Instead, the trust does. In this way, they can qualify for Medicaid and SSI while still getting the assistance you wanted to leave them, all without having to spend everything in the trust first. This can help to give them a higher standard of living than just scraping by right at the poverty line for the rest of their life.

As you can see, there are some serious benefits you want to consider here. Make sure you take the time to look into all of the legal steps you will need to take if that's what you'd like to do.

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