What is a Living Trust?

When it comes to various housing and care communities for older adults, one of the most common misconceptions is that assisted living and nursing homes are essentially the same thing.The simple answer is, they are not. Heres how they are different:Nursing Homes Provide Skilled Medical CareNursing homes are designed for individuals who require ongoing medical supervision and skilled nursing services.Residents may:-Have complex medical conditions-Need rehabilitation after hospitalization-Require around-the-clock nursing care-Depend on specialized healthcare services, labs, medical oversight and moreMedical staff are available 24 hours a day to provide clinical care and monitor residents health in a nursing home.Assisted Living Focuses on IndependenceBy contrast, Assisted Living emphasizes lifestyle, independence, and support.Residents typically:-Live in private apartments or suites-Participate in community activities, programs and events-Receive assistance with activities of daily living, but not necessarily around the clock-Maintain greater control over their daily routinesFor many older adults, assisted living offers the right balance between support and independence. Staff provide care and guidance, but not so much that the individual is bedridden, highly monitored or restricted to a hospital-like setting.At Kavod Senior Life, Assisted Living residents enjoy the best parts of living as Kavod lifts the struggles and isolation of individual home life outside a community. Benefits include:-Three meals a day in a family-style dining environment-Activities such as music, lectures and outings (at no extra cost!)-Housekeeping, laundry and bed-making-Medication monitoring-Five wellness checks per day-On-site access to geriatric medical clinics, physical/occupational and speech therapy, and a variety of health clinics-Available add-on services (oxygen management, incontinence care and escorting to appointments around campus)-Affordable rents that are 66% below market rate in the Denver area!If youre wondering whether a nursing home or Assisted Living is right for you or your loved one, consider the tips above to help you make that decision. We are always happy to discuss your options with no obligation. Contact us today for assistance!Created with the assistance of ChatGPT

Leaving an inheritance is meant to provide security. But when the person receiving it depends on Supplemental Security Income, Medicaid, or another needs-based program, a direct gift can create an unexpected problem.Cash, investments, real estate, and other inherited property may be treated as income or countable resources. This can reduce benefits or make the recipient temporarily ineligible.The good news is that seniors can plan ahead. A properly drafted special needs trust for inheritance may allow money to support a loved one without giving that person direct ownership or unrestricted access to the assets.Why Can a Direct Inheritance Affect Benefits?Supplemental Security Income is a needs-based program. In 2026, an individual generally cannot have more than $2,000 in countable resources, while the limit for a couple is $3,000. Cash, bank accounts, investments, and certain property can count toward those limits.An inheritance generally becomes income for SSI purposes when it has value and is available for the recipient to use. If the inherited property remains available into the following month, it may then be treated as a resource. The timing can depend on estate administration and state law.For example, directly leaving $50,000 to a person receiving SSI could put that person above the programs resource limit. That does not necessarily mean benefits are lost permanently, but eligibility and payments may be interrupted until the situation is properly resolved.Medicaid rules are administered by the states and may differ from SSI rules. Some trusts or trust payments that do not count for SSI can still affect Medicaid eligibility.Which Benefits Are Most Likely to Be Affected?The greatest concern usually involves programs that consider income or assets, including: Supplemental Security Income Certain Medicaid programs Medicaid-funded long-term services and supports Some housing assistance programs Certain state and local benefit programs Social Security Disability Insurance is different from SSI. SSDI is generally based on the persons work record rather than financial need, while SSI has income and resource limits. A person may receive both programs, so families should confirm every benefit before changing an estate plan.What Is a Special Needs Trust?A special needs trustsometimes called a supplemental needs trustis a legal arrangement that holds and manages property for a person with a disability.A trustee controls the assets and uses them according to the trusts instructions. The beneficiary does not receive unrestricted ownership of the money.Social Security describes a special or supplemental needs trust as one that may provide for needs beyond assistance available through public benefit programs. Whether the trust is excluded as a resource depends on its terms, funding, control, state law, and applicable benefit rules.The trust does not replace public benefits. It is generally intended to supplement them.The Best Option for Many Seniors: A Third-Party TrustFor parents and grandparents planning an inheritance, the most relevant option is usually a third-party special needs trust.What does third-party mean?A third-party trust is funded with property belonging to someone other than the beneficiary or the beneficiarys spouse.For example, a senior may create a trust using personal savings for an adult child with a disability. A grandparent may also direct an inheritance into a trust for a grandchild receiving SSI.Social Security specifically recognizes a trust funded by a parent, grandparent, or another person as a third-party trust when the property did not belong to the beneficiary.Why can this protect eligibility?A properly written third-party trust may not count as the beneficiarys resource when the beneficiary cannot: Revoke or terminate the trust Take ownership of the trust assets Direct the trustee to distribute money Use the property without the trustees approval The wording must comply with applicable federal and state rules. Simply calling an account a special needs trust does not make it effective.How Is a First-Party Trust Different?A first-party special needs trust contains money that already belongs to the person with a disability.This may include: A direct inheritance already received A personal injury settlement Back payments Savings belonging to the beneficiary Property placed in the beneficiarys name Qualifying first-party special needs trusts are subject to different federal requirements. The beneficiary generally must have been under age 65 when the trust was established, and the trust must include a provision reimbursing state Medicaid programs after the beneficiarys death, up to the amount of qualifying medical assistance paid.This is why planning before an inheritance is distributed is usually easier than trying to correct a direct gift afterward.How Can Seniors Fund the Trust?A third-party special needs trust can receive assets during the seniors lifetime or after death.Possible funding sources include: Cash and investment accounts Real estate Life insurance proceeds Property transferred through a will Assets from a revocable living trust Retirement accounts, when permitted and properly coordinated Gifts from parents, grandparents, siblings, or other relatives Funding through a willA will can direct the beneficiarys share into the special needs trust rather than giving the property directly to the beneficiary.The will should clearly identify the trust. Naming only the individual in the will and expecting the family to move the money later may expose the inheritance to benefit rules.Funding through life insuranceThe special needs trustnot the individual beneficiarymay be named on the life insurance beneficiary form.Beneficiary forms should be coordinated with the estate plan. A will does not normally override a valid beneficiary designation on an insurance policy or financial account.Funding through a living trustA seniors revocable living trust can direct the beneficiarys share into a special needs trust after the seniors death.An attorney should ensure that the living trust, will, account titles, and beneficiary forms all use consistent instructions.How Trust Payments Can Affect SSIEven when the trust itself is not counted as a resource, the way it distributes money can affect the beneficiarys monthly SSI payment.Cash paid directly to the beneficiaryMoney paid directly from the trust to the beneficiary generally reduces SSI.The trustee should normally pay a store, service provider, landlord, medical office, or other vendor directly rather than handing cash to the beneficiary.Payments for non-shelter expensesWhen the trust pays someone else for items or services other than shelter, those payments generally do not reduce SSI. Examples provided by Social Security include medical care, education, entertainment, and telephone bills.Payments for shelterWhen a trust pays rent, a mortgage, property taxes, heating fuel, electricity, water, or certain other shelter expenses, the beneficiarys SSI payment may be reduced.For 2026, the maximum reduction related to this type of support is generally $351.33 per month, although the actual effect depends on the persons living arrangement and other circumstances.Since September 30, 2024, food provided by others is no longer included in Social Securitys in-kind support and maintenance calculations. Cash or gift cards given directly to the beneficiary can still be treated differently.Choosing the Right TrusteeThe trustee is responsible for managing the inheritance and protecting the beneficiarys interests.Choose someone who: Understands the beneficiarys needs Keeps accurate financial records Can follow trust and benefit rules Communicates clearly with family members Can make objective spending decisions Is willing to serve for many years Knows when to seek legal or benefits advice A sibling or trusted relative may be a good choice, but family relationships alone do not guarantee that someone is prepared for the administrative work.Other options may include: A professional fiduciary A bank or trust company A nonprofit organization Co-trustees A family trustee working with a professional adviser The estate plan should also name at least one successor trustee.Consider an ABLE Account as a ComplementAn Achieving a Better Life Experience account is another tool that may work alongside a special needs trust.An ABLE account is owned by the person with a disability and can be used for qualified disability expenses. Beginning January 1, 2026, eligibility expanded to people whose blindness or disability began before age 46.Up to $100,000 in an ABLE account is generally excluded from the SSI resource calculation. Different rules apply when the account exceeds that amount, and state Medicaid recovery rules may apply after the beneficiarys death.An ABLE account may provide the beneficiary with more flexibility for everyday qualified expenses, while a special needs trust may be better suited for managing a larger inheritance. The two tools should be coordinated by professionals familiar with public benefits.A Practical Planning ChecklistSeniors preparing an inheritance can begin with these steps: Identify every benefit the loved one receives. Confirm whether each program has income or resource limits. Meet with an attorney experienced in special needs planning. Decide whether a third-party special needs trust is appropriate. Choose a trustee and successor trustee. Coordinate the will, living trust, life insurance, and account beneficiaries. Create a written summary of the beneficiarys needs and preferences. Tell relatives not to make direct gifts without reviewing the plan. Consider whether an ABLE account would be useful. Review the plan regularly. Frequently Asked QuestionsCan a person receiving SSI inherit money?Yes, but the inheritance may be counted as income and later as a resource. This can reduce SSI or create temporary ineligibility when countable resources exceed the program limit.Does every inheritance require a special needs trust?No. The answer depends on the beneficiarys benefits, finances, health, age, and long-term needs. A trust may be unnecessary when the person does not receive means-tested assistance.Can a grandparent create a special needs trust?Yes. A grandparent can establish or fund a third-party trust for a grandchild using the grandparents own property.Can the beneficiary control the trust?The beneficiary generally should not have unrestricted control over trust property when benefit protection is the goal. An independent trustee normally decides when and how distributions are made.Does a third-party trust have to repay Medicaid?Third-party trusts funded entirely with someone elses assets are different from first-party trusts funded with the beneficiarys property. Federal Medicaid repayment requirements commonly associated with qualifying first-party trusts do not automatically apply in the same way, but state law and the trust document must be reviewed.Can a trust pay rent?It may, but shelter payments can reduce monthly SSI. The trustee should compare the benefit reduction with the value the housing provides before making the payment.Should other family members name the trust in their wills?They may do so after an attorney confirms the correct trust name and language. Coordinated gifts can help prevent another relative from accidentally leaving assets directly to the beneficiary.Seniors Blue Book helps older adults, families, and caregivers locate trusted legal, financial, housing, healthcare, and aging-related resources in their communities. Organizations serving seniors and people with disabilities can also contact us to learn about a free business listing and enhanced opportunities to reach families searching for support.Contact Seniors Blue Book at [email protected] or call 800-201-9989. This article provides general educational information and is not a substitute for individualized legal, tax, financial, Medicaid, or public-benefits advice.

A Will or Trust: Which is Best for You?When it comes to deciding whether a will or trust is best for you, it is important to understand your options and which one is most appropriate for your situation.WillA testamentary will (simply referred to as a will) is a legal document used to transfer an estate to beneficiaries after the death of the testator (the person making the will). Within the will, the testator usually names a personal representative (same as executor) for the estate. A will is revocable (it can be cancelled by the testator) or it can amended by the testator. For a will to be valid in Idaho, it must meet specific requirements under Idaho law. Living TrustsA person, during his or her lifetime, may create a living trust whereby the settlor (the person making the trust), trustee (the person who has legal authority to manage the trust assets) and beneficiary (the person who makes use of the trust assets) are all the same person. After the settlor dies, depending on the trust instructions, the trust assets may be distributed outright, or held within the trust and distributed over time or upon the happening of a specific event. Living Trusts may be appropriate for persons who own real property in more than one state or have a blended family where spouses have children from prior relationships.Testamentary Trusts A testamentary trust is created upon the death of a person as specified in his or her will and holds assets within the trust instead of outright distribution such as when minor beneficiaries reach a specified age or graduate from college, or when a beneficiary is a person with special needs or disability who receives government benefits.A New or Updated Estate PlanWhether a will or trust is appropriate for you depends on your circumstances. If you already have a will or trust, it should be reviewed occasionally to make sure it reflects your current wishes and needs, or if you have relocated from another state, or upon any significant change in your life such as divorce or death of a spouse or beneficiary. This article was written by Donna A. Schuyler, Attorney, who practices in the areas of estate planning, elder law, guardianship and probate. Donna Schuyler Law, PLLC; elderlawboise.com; Phone 208-344-1947