Margaret Ward came and spoke to the administrative and case management staff at Integrity a couple of weeks ago. Also attending were a couple of the families whose loved ones we serve. Margaret’s information was so important and helpful that we wanted to share it with more of our staff and families, so we asked her to write up a summary of the things she covered in her talk. Our staff at Integrity is happy to assist families in pursuing answers to these tough and sometimes difficult to deal with, yet very necessary, questions.
I am an attorney with Estate Planners of Arkansas, P.A. Our firm practices in the estate planning field, which consists mostly of wills, trusts, special needs trusts, and probate. Every day, we help people choose the most efficient and economical way to leave their money and property to their loved ones, so that they can provide for their families’ care and well-being after their death.
My husband and I have an adult son with Autism, so I’m especially sensitive to the concerns of families of people who are dependent on benefit programs that look at how much money the individual has in the bank. For example, here in Arkansas, to be eligible for SSI and Medicaid, an individual can’t have more than $2,000. That’s not much. So my husband and I have to be smart in how we leave our money to our children, or we could cause our son to lose the benefits he depends on.
There are several ways that your child could end up with an inheritance that could jeopardize their benefits.
If you or your parents have a will that leaves money to your child with a disability, you can cause them to lose their benefits.
If you’ve made no estate plans at all, and you’re a parent, the State of Arkansas says that your children will inherit your property and money after you die. And your child with a disability could be disqualified from SSI and Medicaid. They would lose those benefits until they have spent all the money they inherited, and then they would have to apply all over again.
If you’re a parent, and you die before your own parents, your children could inherit from their grandparents. And your child could end up disqualified.
So what can you do instead?
You could disinherit your child, leaving everything to others.
Or you could leave everything to a sibling or another family member, with the understanding that they will take care of your child. This option is extremely risky – the sibling or relative can use the money as they wish, they could use the money for their own urgent needs, their creditors can come after the money, or it may be divided in a divorce. Your child may not lose their benefits, but they may lose out on money you had hoped would be spent for their well-being.
On the other hand, by planning ahead with a special needs trust, you can provide a way for money to be used for the care and well-being of your family member without jeopardizing their benefits. Others – like grandparents, aunts, and uncles – can also put money into a special needs trust. A special needs trust can be used to provide money to enrich the life of your child without causing them to lose their benefits. And you can rest assured that you’ve taken steps to protect and provide for your loved one in the best way you can after your death.
If you have not consulted an estate planning attorney to plan ahead for your family, I urge you to take that step. And if you have extended family members who want to contribute to the long-term support of your family member, tell them how important it is that they too plan properly to avoid unintended consequences of inheritance. I offer free initial consultations, after-hours appointments, and I can travel to your home if that’s more convenient. I can tell you from personal experience that completing an estate plan that provides for our family brings great peace of mind.
Margaret R. Ward, J.D.
Estate Planners of Arkansas, P.A.
2504 McCain Blvd., Suite 224
North Little Rock, AR 72116