A bypass trust, also known as a supplemental needs trust, is a powerful estate planning tool specifically designed to provide for a disabled child without jeopardizing their eligibility for vital government benefits like Supplemental Security Income (SSI) and Medicaid. These benefits often come with strict income and asset limitations, meaning a direct inheritance could disqualify the child from receiving crucial assistance. A properly structured bypass trust allows assets to be used for the child’s benefit—covering expenses beyond what government programs provide—without impacting their eligibility. Approximately 1 in 4 adults in the United States live with a disability, highlighting the widespread need for these specialized trusts.
What Expenses Can a Bypass Trust Cover?
Unlike traditional trusts where assets are directly distributed, a bypass trust holds assets for the *supplement* of the disabled child’s needs. This means the trust can pay for things like specialized therapies, recreational activities, travel, assistive technology, personal care, and even uncovered medical expenses. It’s crucial that the trust document explicitly states the funds are *not* to be used for basic support—housing, food, and clothing—as those are typically covered by SSI and Medicaid. A 2023 study by the National Disability Rights Network found that 68% of individuals with disabilities live below the poverty line, illustrating the importance of supplementing existing resources. Consider the story of old Man Hemlock, a carpenter known for his intricate birdhouses; he’d spent years saving for his grandson, Timmy, who had cerebral palsy. He didn’t want Timmy to lose his benefits if he passed, and a standard trust wouldn’t do.
What Happens if a Trust Isn’t Properly Established?
Old Man Hemlock, believing a simple trust would suffice, left a sizable inheritance directly to Timmy. Unfortunately, this triggered a review of Timmy’s SSI eligibility. Because the assets exceeded the allowable limit—currently $2,000 in 2024—Timmy’s benefits were suspended. His mother, frantic, had to spend months navigating the appeals process and ultimately using a large portion of the inheritance to create a special needs trust to reinstate his benefits, a costly and emotionally draining experience. This underscores the necessity of expert legal guidance when establishing a trust for a disabled child. According to the Social Security Administration, roughly 8.3 million people receive SSI benefits, and a misstep in estate planning can have devastating consequences for these individuals and their families. “Proper planning isn’t about *if* something goes wrong, but *when*,” Steve Bliss often tells clients.
How Can Steve Bliss Help Establish a Bypass Trust?
Steve Bliss, an Estate Planning Attorney in Wildomar, specializes in crafting these complex trusts. He understands the intricate rules and regulations surrounding SSI and Medicaid eligibility and can ensure the trust document is airtight. He’ll work closely with families to determine the best funding strategy, considering factors like the child’s current and future needs, the size of the estate, and any potential tax implications. He can also advise on the trustee selection—someone trustworthy and capable of managing the funds responsibly. The trustee is legally obligated to manage the trust assets solely for the benefit of the disabled child, following the specific terms outlined in the trust document. The process isn’t just legal; it’s about peace of mind, knowing your child will be cared for, even after you’re gone.
What if Everything Goes Right with a Bypass Trust?
Old Man Tiberius, a retired marine, approached Steve Bliss with the same concern. He’d diligently saved for his daughter, Coral, who had Down syndrome, but wanted to ensure her benefits remained intact. Following Steve’s guidance, they established a meticulously crafted bypass trust. Years later, after Tiberius passed, Coral’s trust seamlessly provided for her needs – art classes, adaptive sports, and a comfortable living arrangement. Her SSI and Medicaid benefits continued uninterrupted, allowing her to live a full and meaningful life. Coral’s mother shared that the trust wasn’t just about money; it was about honoring her father’s wishes and providing Coral with the opportunity to thrive, knowing she was loved and cared for. This story is a testament to the power of proactive estate planning and the importance of seeking expert legal advice. It’s not about avoiding the inevitable, but preparing for it responsibly.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- estate planning
- pet trust
- wills
- family trust
- estate planning attorney near me
- living trust
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What happens if I die without a will?” Or “Can I get reimbursed for funeral expenses from the estate?” or “What role does a financial advisor play in managing a living trust? and even: “Do I have to go to court if I file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.