At my firm, I meet with a lot of couples who drafted a Last Will &
Testament when they were younger. Those wills may have been completely
appropriate at the time they were executed, but now they’re outdated. Such
wills, commonly referred to as “Sweetheart Wills,” usually leave
everything to each other and the couple’s children.
While this was unquestionably fitting when a couple is young and their
children were small, it is not the best approach for empty nesters. But
it’s not about the children heading off to college and starting
their own families, it’s about getting older and protecting assets
if a spouse moves into a nursing home or requires long-term care.
Is it Time to Update Your Estate Plan?
Thanks to advances in modern medicine, Americans are now living longer
than ever before. This means that seniors are living well into their 70s,
80s, 90s, and beyond. Eventually, one spouse passes away and the other
may end up needing to turn to Medicaid to cover the costs of some, or
all of their care.
But, for a senior to qualify for Medicaid, they must meet Medicaid’s
income and asset requirements. To ensure an elderly person meets these
requirements and protects their assets, they can take certain steps through
estate planning. A “Supplemental Needs Trust” in particular, should be incorporated
into a person’s Last Will & Testament.
A Supplemental Needs Trust benefits a disabled beneficiary, namely a surviving
spouse. What it does is preserve their inheritance so they can still qualify
for, and receive their Medicaid and SSI benefits – understandably
this is vital.
In this scenario, the trustee uses the
trust assets to help take care of the beneficiary, which supplements the government
benefits, but it doesn’t replace them. This is absolutely critical
when a spouse is already receiving government benefits when their husband
or wife passes away. You see, if you were to die and all of your assets
passed to your surviving spouse, it would disqualify him or her from receiving
government benefits. So, to prevent this from happening and give you peace
of mind, you draft a Supplemental Needs Trust.
Estate Planning for Singles
To learn more about how a Supplemental Needs Trust can prevent a surviving
spouse from losing their government benefits,
contact my Williamson County estate planning firm.