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Estate Planning for Public Benefits Protection

Learn step-by-step estate planning strategies to protect public benefits eligibility. Understand SSI, SSDI, Medicaid, Medicare, and trust drafting essentials. Explore spousal protection and funding options for comprehensive planning.

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Estate Planning for Public Benefits Protection

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  1. STEP BY STEP: SNTS AND ESTATE PLANNING Suncoast estate planning council October 15, 2009 Mary Alice Jackson, esq. majackson@boyerjackson.com www.boyerjackson.com

  2. STEP 1 – THE BASIC ANALYSIS • Is there a client or beneficiary who is receiving public benefits, who might qualify for public benefits in the future or who could benefit from the programs now? • SSI • SSDI • Medicaid • Medicare • If no, grab some more breakfast and turn on your iphones….

  3. STEP 2 – EXISTING ESTATE PLANS • Outright distributions will cause a loss of means tested public benefits • Mandatory income distributions may cause a loss of means tested public benefits • Discretionary trust language can be used to protect benefits • These discretionary trusts are “third party” special needs trusts • NOTE: ELIGIBILITY REQUIREMENTS FOR SSI, MEDICAID, HUD HOUSING, ETC. ARE ALWAYS THE SAME • TERMS OF THE BEQUEST ARE THE KEY

  4. STEP 3 – BEGINNING THE PLANNING • Must ask about disability status of any potential beneficiary • SNT can be created within a LWT , Rev Trust or Irrev Trust • Keys to drafting: • No mandatory distributions • Spendthrift clauses • No ability for beneficiary to revoke, terminate or compel

  5. STEP 4 – THE DETAILS • Trustee must be able to understand program regulations • Beneficiary designations: • “to the trustee of the Bobby Bowden Special Needs Trust dated October 15, 2009” • Applies to all assets that will be used to fund the trust • Pay directly to the SNT trustee even if SNT created under Will • Insurance, annuities, IRAs** • **Third party IRAs can be designated into SNT but 1st party IRAs cannot under current IRS regs

  6. STEP 5 – STAND ALONE 3D PARTIES • For current funding • Differing parties want to fund trust • Tax planning potential • Long term care planning needs

  7. STEP 6 – SPOUSAL PROTECTION • Sec. 732.4045, Fla. Stat. • “Qualifying Special Needs Trusts” • Why? • When? • Issues • Is failure to create a QSNT malpractice?

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