 “Just-in-case” planning means more than packing a rain jacket for your weeklong vacation in the sun . . . Just in case planning includes considering what will happen if one of your loved ones becomes disabled after you completed your estate plan. At the time you completed your estate plan your loved one was not disabled, but after you have completed your estate plan life happens and your loved one is now disabled. We want to think – for better or worst – that disability affects other people. Facts, however, prove otherwise:
 Without a crystal ball to see into the future we, of course, do not know of our own demise nor the wellbeing of our loved ones at the time of our demise. Consequently, the future welfare of your loved ones may depend on whether you have considered the critical question of what will happen if your loved one becomes disabled at a future time. Things to Know about Disability BenefitsThe welfare of a disabled loved one depends on them qualifying for government benefits. More than financial assistance, disability benefits include an array of services available to disabled persons, who are deemed economically eligible. Unfortunately, a monetary gift or inheritance from you may disqualify this loved one from being economically eligible. While the inheritance may replace lost economic assistance, the loss of access to daily services will disrupt their lives in unimaginable ways. If this disruption happens, your well-meaning gift could become more of a curse than a blessing. Standby Supplemental Needs TrustTo avoid the possibility that a disabled loved one will lose access to the array of disability services because he or she has too much money, you will want to set up a standby supplemental needs trust as part of your estate plan.
A “standby” supplemental needs trust does just what its name implies: the supplemental needs trust is not funded automatically but is on standby. The trust comes into existence (i.e., is funded) only if a beneficiary is disabled at the time of your death or even later. (Some states’ disability eligibility rules permit the trust to spring to life if your loved one becomes disabled later after your death but before the inheritance has been fully distributed.) If at the time of your demise your loved one is disabled and is receiving disability benefits, the inheritance he or she will receive from you will be adjusted to a distribution in a supplemental needs trust, which will not disqualify your loved one from continued receipt of disability benefits and services. At this point the inheritance now in the supplemental needs trust can be spent on any expense not covered by disability benefits paid for by the government. Thus, the inheritance will supplement the disability benefits, and truly enhance your loved one’s life without disrupting the benefits and services they already receive.  Final Thought. Since you do not know whether the loved one whom you are leaving an inheritance will become disabled, then your estate plan should include supplemental needs trust provisions. If you do have these standby supplemental needs trust provisions in your estate plan – and you need them – then it will take more time and even more money to correct the problem. However, if it the standby supplemental needs trust is not ever needed (i.e., no one actually becomes disabled), then this trust will never be funded. So you should be sure to include the standby supplemental needs trust provisions in your estate plan—just in case.
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