Ask a Special Needs Trust Attorney: Using Life Insurance for Special Needs Planning
The foundation of a good estate plan is life insurance. In addition to providing immediate cash at death, life insurance helps support dependents, take care of the deceased person’s debts, funeral expenses, and income or estate taxes. Life insurance can also be a powerful part of a special needs plan,for a spouse or disabled child.
Life Insurance Categories
There are two main life insurance categories – term life insurance and whole life insurance. Term life insurance provides coverage for a specific period, such as 10, 15, 20, or 25 years, and is renewable. Permanent life insurance provides lifelong coverage so long as the policy is in force. Permanent life insurance is usually more expensive than term life insurance. Many policies have cash values that can be used by the insured during their lifetime. Choosing the right life insurance plan depends on many factors like age, number of dependents, whether any of your dependents are disabled, and the insured’s health. Many employers offer group life insurance to their employees. The negative of these plans is that if employment ends, so does the benefit. To learn about life insurance plans and options, seek the advice of a financial advisor or a special needs trust attorney in New Jesery.
What is a Special Needs Trust?
A special needs trust helps care for a family member with a disability. It can help pay for medical care and treatment, entertainment, and education, all without interfering with the beneficiary’s Social Security Income, (SSI), Medicaid, or other government programs.
The most challenging part of creating a special needs trust is funding it. If the individual is not independently wealthy, a life insurance plan, payable on death to the special needs trust is a good way to provide for loved ones following the insured’s death.
For individuals with a child with special needs or a disabled spouse, a combination of term and permanent life insurance may be advisable. The biggest benefit of a special needs trust is the peace of mind of the insured – knowing that in the event of death, their loved ones will have access to financial resources.
Where to Get Help
Special needs trusts are one of the many options available for families seeking to plan for a disabled child’s financial future. They can also be used to plan for the financial future of your spouse. It is important to consult a special needs trusts attorney that has experience in special needs law and financial planning. For more information about special needs trusts click here or call (201) 690-1642 to schedule a confidential consultation with the special needs trusts attorneys at the Giro Law Firm.
The Giro Law Firm is a New Jersey and New York law firm located in Newark, NJ that handles a wide range of legal matters that affect the elderly and disabled populations, including retirement, guardianship, health care, long term care planning, Social Security, special needs trusts, Medicare/Medicaid, among other legal services.