Jun 04, 2015
By Estate Planner Rick Law of the Estate Planning Center at Law Elder Law in Aurora, Illinois, in Western Chicagoland.
One of the main goals in having a special-needs trust drawn up when dealing with Alzheimer’s is to make sure that your spouse is taken care of. One way to protect the spouse is to draft a testamentary Special Needs Trust.
A trust established by a will or a “testamentary trust” is established under the terms of a will and is only effective upon the individual’s death.
A testamentary special-needs trust is created under a will and allows a community spouse (i.e., the non-institutionalized spouse) to leave assets for the benefit of the institutionalized spouse in order to cover supplemental needs not covered by Medicaid. Money stays in the trust until the institutionalized spouse needs such goods or services as differentials in the cost between private and shared rooms, dental procedures, hearing aids, dentures, special wheelchairs/mobility devices, and other quality-of-care needs not provided for by governmental benefits.
The advantage of the testamentary special-needs trust is that while there may be substantial assets in trust for the institutionalized spouse, currently these assets may not be counted against the spouse for Medicaid eligibility purposes. Therefore, Medicaid coverage continues and there is a source of money available for additional or supplemental needs.
If a trust is properly drafted and the proper strategy is used, and if a community spouse leaves the assets to the institutionalized spouse through a testamentary means, then potentially unlimited amounts of assets could be left for the beneficiary.
This is because the person who is institutionalized is not treated as having those assets available to pay for care; the reason for that is because a properly drafted special-needs trust that is also properly funded in allowable manners has funds in it that are not treated as having come from the individuals themselves. Therefore, the amount of money in the trust is irrelevant because it didn’t come from someone who has a duty of care.
Too many families needlessly lose everything they have. Don’t let that be you. If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now, because when you’re out of money, you’re out of options!
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care. Call 800-310-3100 for your free consultation now!
“We would be lost without Law Elder Law! We walked in their doors over a year ago feeling lost and confused. With a father/father-in-law suffering from Alzheimer’s, we were overwhelmed by the Medicaid process, selling his home, protecting the assets he worked for his entire life, and finding him a memory-care facility that we could trust as his new home.
Law Elder Law helped with all of it! From the minute we walked out of our first meeting, we knew we (and he) were in good hands. We could not have possibly navigated all that had to be done without their expertise.”
A.M., Client of Law Hesselbaum and Law Elder Law