As parents and other loved ones age, finding the right balance of support and independence becomes a delicate negotiation, and can sometimes strain relationships severely. In some cases, parents who utilize government assistance face significant risks when it comes to planning for senior living. Specifically, seniors and those with disabilities that keep them from working must not exceed certain income or property thresholds if they hope to keep or obtain assistance like Medicare and Medicaid.

Realistically, this means that a parent with some resources may find themselves stuck in a financial gap where they make too much or own too much to qualify for assistance, but otherwise they cannot afford the high costs of aging and needing additional support and treatment. Without proper planning, your parent may lose everything to skyrocketing costs of senior care because they exceed these income and property thresholds.

Fortunately, the law allows many people stuck in just this place to remedy the issue with special needs trusts, which may help your loved one qualify for care they dearly need without draining absolutely all of their resources.

How do special needs trusts work?

The primary use of a special needs trust is to hold property for someone so that they have all the resources they need for daily living and even some extra, but without owning too much property that they cannot qualify for care subsidies.

By placing such a person’s property in a trust, it is no longer legally part of their estate, and, therefore, cannot disqualify them from government assistance. Of course, most people are not eager to let go of all of their possessions and assets, so it is important to work with your loved one as much as possible to set the terms of the trust in ways that serve their needs but also retain their dignity.

Once the assets are in the trust, the beneficiary may receive regular payouts to cover living expenses and many other justifiable uses, such as transportation, entertainment, and gifts. With a little careful planning, an aging or disabled person can still enjoy all or most of the same conveniences and freedoms they did before placing their assets in the trust, while still qualifying for government assistance.

Protect the ones you love sooner rather than later

The sooner you look into a special needs trust for yourself, the more time you have to sort through your parents’ own particular setbacks and opportunities and still deal with the bureaucracy and significant paperwork of government assistance. A strong legal strategy and some careful planning can ensure that your parents have the care they need now and in the future, without draining away all of their resources.