Question: I want to be sure that we do not inadvertently cause a disqualification of my nephew’s government benefits. What are the types of assets that would endanger my nephew’s government benefits if they are paid directly to the him? As background, we set up a trust for my nephew who has special needs. I understand that the money kept in the special needs trust is not considered an available resource for him. Answer: All of your family members and friends should be aware that financial gifts to him are welcome, but they cannot be given directly to him. An option may be for gifts to be made directly to his trust. Gifts can come in many different forms:
- A gift of money or other property.
- An inheritance.
- Retirement benefits.
- Life insurance.
- Joint accounts.
- Lawsuit settlement.
Once a gift is made, it will be necessary to convert such property into exempt (non-countable) assets or he could lose his benefits. It is essential that people understand the reason for segregating these assets. If you have any questions about planning for individuals with special needs or the types of assets which are considered a countable resource, please let me know. Comment: I would strong advise anyone who is looking to make gifts to seek a consultation with an attorney who is well versed in this area of the law as it is fairly easy to get tripped up. While the trust may be able to be utilized, there may be other and better means of assisting a special needs beneficiary. Moreover, in some circumstances, the trust may not be a viable option As always, if you have any questions or would like to learn more, please let me know.
If you have any questions or would like more information please contact Steve Shane at: firstname.lastname@example.org | 301.575.0313.
About Steve Shane
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.