Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Monday, September 12, 2011

Providing for Disabled Heirs

TrustTwelve percent of the U.S. population has a severe mental or physical disability, according to United State Census data. Additionally, two-thirds of caregivers do not have a plan for the future support of the disabled individual they care for. Three tips for planning for the future support of disabled heirs are below:

  1. Create a trust that will make mortgage and tax payments on a home for a disabled adult, or create a qualified personal residence trust. A qualified personal residence trust allows the homeowner to continue living in the home for a number of years before ownership is transferred to an heir at a discount.
  2. Provide assets to a disabled heir without endangering government benefits by creating a special needs trust. The trust provides long-term care to the beneficiary and is not considered available to the beneficiary for Medicaid purposes.
  3. Leave a disabled child’s inheritance in a trust instead of providing an additional inheritance to a sibling with instructions that he or she must care for the disabled child. A caregiver can fund the disabled child’s trust further with a permanent life insurance policy.

See Kelly Greene, Taking Care of Disabled Heirs: When Loved Ones Need Help, Estate Planning Can be Tricky, The Wall Street Journal, Sep. 3, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.


Disability Planning - Health Care, Disability Planning - Property Management, Trusts | Permalink

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