Providing for a Beneficiary with a Mental Disability

Whether you are old or young, rich or poor, a parent or a businessperson (or both!), you should create an estate plan. Estate planning is valuable no matter who you are, so don’t use your age or the size of your bank account as an excuse. Just think of all the important decisions your estate plan will contain. If you have children, you should have an estate plan to stipulate what will happen to them if you pass away. If you are ever sick or incapacitated, an estate plan can dictate who is allowed to act on your behalf. And if you need to provide for a beneficiary with a mental disability, an estate plan can help you plan for your loved one’s future. There are so many reasons to create an estate plan, but let’s look closely at that last reason: planning for a beneficiary with a mental disability. Why is it important to carefully create your estate plan if your beneficiary has a mental disability? What should you consider as you go about this process? Read on to find out.

Providing for a Beneficiary with a Mental Disability

If you are providing for a beneficiary with a mental disability, you will probably need to take a few extra steps during the estate planning process to ensure your desires for your estate are clear and that your beneficiary will productively use the given assets after your death. Consider the following before you meet with your attorney: 1. Is your loved one capable of managing his or her own finances? If not, how can you protect your beneficiary and ensure the gifted property and assets won’t be squandered? If you’re concerned that your beneficiary cannot responsibly manage money, consider using a trust. The beneficiary will receive the designated property and assets, but the reliable trustee (who you will choose) will administer those gifts as you see fit. Try to choose someone who is savvy with money, well-acquainted with your loved one, and relatively young (so they can hold this position for decades to come). 2. What if your beneficiary receives financial support through a government program like Supplemental Security Income or Medicaid? Will your beneficiary still be eligible for these programs? You may need to look into a special needs trust (also known as a supplemental needs trust), which allows a beneficiary with a mental disability to receive benefits from government programs to pay for basic human needs (food, shelter, clothing) and also use their inheritance to enhance their life (entertainment, electronics, education). 3. Can you simply leave the property to someone you trust and rely on them to look after your loved one? Yes, you can. However, this plan is not legally binding and could result in tragedy. What if this trusted person doesn’t look after your loved one as they promised? What if this trusted person dies and doesn’t consider your loved one during their own estate planning? We highly recommend that you create an estate plan instead of leaving your loved one’s future in someone else’s hands.

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It is impossible to know what your loved one will need in the future, but you can do your best to provide for them with careful estate planning. To ensure you’re making the best choices possible, be sure to discuss your loved one’s disability with your attorney so they’re aware of the beneficiary’s abilities and limitations. In addition to helping you with all of the concerns above, your attorney should also consider common estate planning issues like lowering taxes and avoiding probate. If you’re interested in learning more about preparing your estate plan for a beneficiary with a mental disability, please give Parks & Jones a call if you live in southwest Missouri. We can help you choose the best option for you and your family.

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