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SENIOR SOURCE: Don't harm your beneficiaries

The beneficiaries of your estate plan may be harmed more by your planning than they are helped.
Credit: Ross & Shoalmire, Elder Attorneys at Law

LONGVIEW, Texas — The beneficiaries of your estate plan may be harmed more by your planning than they are helped.

Yes, you read that correctly. 

Did you know that if you do not incorporate adequate contingency planning into your estate planning documents then you may be harming your beneficiaries more than you are helping them? 

Don't harm your beneficiaries!

Wouldn't you prefer to help your beneficiaries instead of harm them? If you don't take proper steps in your estate planning, your efforts to help may prove to be futile and troublesome. But, with the right estate planning in place, you can rest assured that you are doing everything you can to ensure your beneficiaries are well protected. I will work with you to help you identify specific situations you need to plan for that may exist in your specific situation as well as those that everyone should plan for. Call today to schedule a free consultation. https://www.rossandshoalmire.com/bio/attorney-ben-king.cfm

Posted by Ross & Shoalmire, PLLC on Tuesday, May 19, 2020

Often times an individual’s beneficiary is receiving a government needs based benefit such as Medicaid, and if they receive an inheritance their new resource limit would disqualify them from their current benefits, at least for a period of time. 

This could result in the beneficiary (and other beneficiaries for that matter) not receiving any additional benefit from the inheritance. As an example, if a Medicaid recipient directly receives a $50,000 inheritance, then the recipient will be disqualified from receiving Medicaid benefits until those funds are “spent down” and the recipient again falls below the permissible resource limit.

 The beneficiary is no better off than if the $50,000 had been given to another beneficiary. However, if the $50,000 had been placed into a special needs trust for the benefit of the beneficiary receiving Medicaid benefits, then that beneficiary could continue to receive the full Medicaid benefit and also be able to retain the $50,000 for certain other allowable needs.

In some instances, this type of oversight by the grantor can be remedied on the back end through the probate process, but not always. And even then, the full benefit of the inheritance may not be realized by the beneficiary and his/her heirs as compared to if proper planning had been done at the outset. 

As you plan for how your assets will be administered upon your death, be sure to consider contingency planning that needs to be in place. A qualified elder law attorney can discuss these matters with you and help you identify matters you should plan for but might not have considered. In the end, your planning needs to account for what might happen, not what you want to happen.

Visit Ross & Shoalmire - Elder Attorneys at Law for more information.