In the world of estate
planning, the best offense to changes in the law and life circumstances is usually
a good defense. Rather than running to court or the drafting attorney each time
a crisis occurs, estate plans can be drafted “defensively,” such that several
escape hatches or other planning options spring into existence whenever
necessary. This series discusses several areas where such defensive strategies
can be effectively integrated into the estate plan.
Unanticipated
Special Needs
One unanticipated life
event might be the development of special needs by a beneficiary. If a child
suffers a debilitating injury, or develops a mental disability, a large
inheritance could disqualify such a child from needs-based governmental
assistance. To prepare for this scenario, a trust could be drafted with
provisions for a “springing” special needs trust, which only comes into
existence if a beneficiary receives needs-based government assistance. A
special needs trust preserves the inheritance without disqualifying a child
from government assistance. Such a trust can also be switched “off” if the
child later overcomes the disability.
If you have questions about special needs trusts, contact our San Francisco Living Trust Attorneys.
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UNDER TREASURY CIRCULAR 230: The United States federal tax advice, if any, contained in
this website and associated websites may not be used or referred to in the
promoting, marketing, or recommending of any entity, investment plan, or
arrangement, nor is such advice intended or written to be used, and may not be
used, by a taxpayer for the purpose of avoiding federal tax penalties.
