Here’s an example: Mr. and Mrs. Jones have a small house that is paid for and about $20,000 in other financial assets. They have a child with special needs, David, who received government benefit assistance by way of Medicaid and Supplemental Security Income (SSI).

If one parent should die without a will, their assets that would normally pass by a will (most likely to the spouse) will be divided between the spouse and David (in most states). This is by operation of law known as intestacy.

In this instance, David may receive $10,000 in his own name. This will disqualify him for Medicaid and SSI until that $10,000 is spent down to the maximum amount allowed in assets to qualify for Medicaid and SSI, which in most states is $2,000.

Not only will this cost David $8,000 (in this example), but that $8,000 must largely be spent down on items that the government would have paid for.

In addition, the house could possibly be lost as well, as it may be counted as a ‘countable asset’ deemed unavailable to David. This could be a result of David owning the house and then perhaps having to move into a care facility or other living arrangement.

If the $10,000 were put in a special needs trust, David would not only continue qualifying to receive Medicaid and SSI, but would also have the $10,000 available to supplement those services and the house may be more secure.

You do not need to be rich to build a safety net for your loved one. This cost of NOT planning may be much higher than the cost of planning.

Due to the complexity of federal and state laws, you may require specially trained professionals to help you plan for the future of your dependent with special needs.