Voelz, Reed & Mount LLC. – Can I Leave Assets to a Disabled Loved One When I Die?


Most people want to leave some or all of their assets to their loved ones when they die. That can be complicated for individuals who have disabled loved ones. Many people believe that if they have a disabled loved one then that disabled person cannot receive an inheritance at all. That is not true. When handled correctly, you can leave assets for the benefit of the people you love, even if one or more of them are disabled.

The term “disabled person” may mean different things in the context of estate planning. It could mean that the person has been determined to be “disabled” by the Social Security Administration. In that situation the disabled person is likely receiving government benefits that could be disrupted if an inheritance is not handled correctly. “Disabled person” could also refer to a person who is battling a serious drug or alcohol addiction. That person may not have government benefits to worry about, but leaving money directly to that person could enable addictive behaviors leading to injury or even death. “Disabled person” might also refer to a person who has never been deemed disabled by the Social Security Administration, but who does not have the ability to preserve and protect assets on his or her own.

In any of the cases above, certain types of trusts may be the best tool for protecting the assets that you want to leave to a disabled person after your death.

Special needs trusts are trusts that can be established for the benefit of a disabled person so that the assets in the trust do not count as a resource for the disabled person. This is especially important if the disabled person receives Supplement Security Income and/or Medicaid. The trustee of a special needs trust can make distributions for the benefit of the disabled person after you die in ways that do not disrupt his or her benefits.

Trusts can also be established as a part of an estate plan for the benefit of a disabled person with an addiction issue or inability to manage money. A trustee can decide when it is appropriate to make distributions in these cases. The trust language can allow a trustee to make distributions for drug rehabilitation or treatment programs, educational expenses, housing, and mental health services that are often times not covered by insurance. This type of trust can also allow the trustee to make distributions for the benefit of the beneficiary but not directly to the trust beneficiary if such distributions could cause harm to the beneficiary.

It is important to discuss the situation of each loved one that you choose to leave assets to after your death with your estate planning attorney.

Contact Voelz, Reed, & Mount, LLC in Columbus about estate planning techniques that may help you to leave gifts to disabled loved ones after your death.