Using a special needs trust for the disabled to protect an inheritance.

Attorney Tom Olsen: I had a client last week. She's been a long-time client, and her son is on Medicare and Medicaid. He's a younger man, right?

Attorney Robert Hidock: He's blended, yes.

Tom: He's got some kind of disability.

Robert: He is on the spectrum.

Tom: Is on governmental benefits, that's the bottom line. Out of the blue, he inherited money from his dad and she calls up and says, "Oh my goodness, he's inherited his money from his dad. That's going to disqualify him from the governmental benefits that he is on. What are we going to do?" We were able to help them very easily.

Robert: We were. In fact, we did a special needs trust for the disabled where the money will go into a special trust. Mom will be the trustee. It won't impact any of his benefits at all and his mom can use that money for him any way she wants. She just can't give him cash directly. Then she had a follow-up question because you did her trust in the first place, and so she was worried about the trust that you did for her if that was going to impact him. The answer is no because you put a special needs provision in that trust, so both trusts now will not impact any of his benefits that he's receiving.

Tom: Just out of curiosity, she's a trustee over her son's money in the special needs trust, but what would she typically use that money for? Christmas presents? What else?

Robert: If he was driving, she could use it for a car payment. If her son was living somewhere, she could pay rent with it. She could buy him a computer, she could take him on a vacation. Really anything. It's not supposed to take the place just for medical use, it's for his life.

Tom: All right. The governmental benefits that he's on, it's not enough to live on, you might say. The beauty of it is that he continued to get these governmental benefits and gets the benefit of this money that he inherited out of the blue out of his dad. That worked out really well.

Robert: Yes, it's a win-win.

[00:01:56] [END OF AUDIO]