Tag Archives: Assets

Special Needs Planning: Special Needs Trust

Retirement Readings

May 18, 2016

special needs


The purpose of a special needs trust is to provide financial assets for a disabled child’s future care and well being, while maintaining the child’s eligibility for government benefits.

Under current federal law, an individual with more than $2,000 in assets is disqualified from most needs-based government benefits. State assistance programs may also be based on need. If your child (or grandchild) were to receive an inheritance from you directly, it’s highly probable that the inheritance would disqualify the child from receiving needed benefits. Do not leave assets to the child directly.

With a special needs trust, however, you leave assets to the trust. The trust is managed by a trustee, who then can use trust assets on the child’s behalf. Special needs trust requirements are stringent, so it’s important that you consult with an experienced attorney in setting one up.

In a properly-structured special needs trust, the trust holds title to the property for the benefit of the disabled child or adult. The assets in the special needs trust can then be used to provide for the needs of the disabled individual, as well as to supplement benefits received from government assistance programs. For example, trust assets can be used for:

  • transportation, including purchase of a vehicle;

  • training, rehabilitation or education programs;

  • equipment;

  • medical, dental and eyesight expenses;

  • entertainment;

  • insurance premiums;

  • companion/home health aide expenses; and

  • items to enhance quality of life/self esteem.

A special needs trust can hold cash, as well as title to stocks, bonds, mutual funds, real estate and personal property. In addition, it can own and/or be the beneficiary of life insurance policies. Another use for special needs trusts is to receive any proceeds from personal injury settlements without jeopardizing eligibility for government benefits.

In order to retain eligibility for government benefits, it’s important that well-intentioned family members, such as grandparents, understand that their will should bequeath assets to the special needs trust, and not directly to the disabled individual.

Please contact my office if we can be of assistance.

from the Masters...


by Zig Ziglar

When you plan and prepare carefully, you can legitimately expect to have success in your efforts. When you recognize and develop the winning qualities that you were born with, the winner you were born to be emerges. Although not all your expectations are going to come to pass, you give yourself an infinitely better chance of succeeding by taking the proper steps. Regardless of your goal–losing weight, making more sales, furthering your education, earning a promotion, saving money for a new home or an exotic vacation–you can expect to achieve your goal if you plan and prepare for it.

Also understand that the path from where you are to where you want to be is not always smooth and straight. The reason for the twists and bumps is simple, and it has nothing to do with you. It has more to do with the fact that not everyone is as interested in your success as you are. Some people may accidentally hinder your efforts; others who are in competition with you and have little or no integrity may try to sabotage your efforts.

Keep in mind, though, that when you hit those roadblocks your character, commitment, and attitude are the determining factors in your success. Carefully review your plan of action, seek wise counsel, and be particularly careful to feed your mind good information. An optimistic, positive mind is far more likely to come up with creative solutions than a mind that dwells on setbacks and difficulties.

from the Masters…


On Self-Limiting Beliefs


“Being challenged in life is inevitable, being defeated is optional.”

— Roger Crawford

“We would accomplish many more things if we did not think of them as impossible.”

— Chretien Malesherbes

“If a man harbors any sort of fear, it percolates through all his thinking, damages his personality, makes him a landlord to a ghost.”

— Lloyd C. Douglas

“The outer limit of your potential is determined solely by your own beliefs and your own confidence in what you think is possible.”

— Brian Tracy


On Ideas


“Ideas are like stars; you will not succeed in touching them with your hands. But like the seafaring man on the desert of waters, you choose them as your guides, and following them you will reach your destiny.”

— Carl Schurz

“Ideas are information taking shape.”

— Jim Rohn

“Take ownership of an idea and the idea will take ownership of you.”

— Mark Victor Hansen

“There is no adequate defense, except stupidity, against the impact of a new idea.”

— Percy Williams Bridgman

Paying The Estate Tax Bill

estate tax billThe federal government will not accept a percentage of your estate as payment for your estate tax bill. Instead, your estate tax bill must be paid in cash, and it must be paid within nine months after your death.

If your estate is subject to the federal estate tax, there are FOUR ways to provide your estate with the cash needed to pay your estate tax bill:

1. 100% METHOD

You could accumulate enough cash in your estate to pay your estate tax bill outright. Rarely, however, does a successful person accumulate such large sums of cash. Instead, the reason for financial success is usually due to the investment of cash in appreciating assets, rather than accumulating it in a bank.


Your estate could borrow the cash needed to pay your estate tax bill. This, however, only defers the problem, since the money will then have to be repaid with interest.


Your estate could liquidate sufficient assets to pay your estate tax bill. This choice may make sense if your estate owns considerable assets that can be readily sold for a gain following your death. Keep in mind, however, that if a forced liquidation is necessary, it may bring only a small fraction of the true value of your assets. In addition, sales expenses are bound to be incurred.


Assuming you qualify, you can arrange now to pay your estate tax bill with life insurance dollars. For every dollar your estate needs, you can give an insurance company from approximately one to seven cents a year, depending on your age and health. No matter how long you live, it is unlikely you will ever give the insurance company more than 100 cents on the dollar. In addition, the life insurance policy can frequently be structured to accommodate your unique premium payment requirements.

Please contact my office (Contact@BenefitCI.com) for more information on estate taxation and strategies you may be able to use in order to minimize your estate tax bill.