Estate Planning that Includes Individuals Diagnosed with Mental Illness
Mental illness in the United States is more prevalent than many people realize. This type of illness is underfunded in the healthcare sector, infrequently addressed in legislation, and rarely discussed openly. It's no surprise that mental illness is seldom mentioned in estate planning.
There are some important issues to consider when planning an estate that involves a mentally ill family member. First of all, the severity of the illness should be considered.
If this person has been diagnosed with bipolar disorder or schizophrenia there may be times when decision-making is difficult for them. Other mental illnesses are not as severe and won’t have as much of an impact. This type of consideration should be discussed as a family. Either way, determine the role of this person in the estate plan and identify any limitations that should be placed on the person based on their illness.
- Can they serve as a fiduciary?
- Can they continue to qualify for disability benefits?
- Are they able to manage and care for financial assets?
When it comes to disability benefits, you may be advised to establish a special needs trust. The beneficiary does not have direct access the trust, only the trustee does, so the government cannot include the trust when considering whether the beneficiary meets the eligible income level for benefits.
A special needs trust is one of several creative tools made available to families of those diagnosed with mental illness. We hope to raise awareness of the need for plans to be put in place to help care for those with a mental disability or any disability for that matter. Click here to read more about the importance of proper estate planning for those who would benefit the most.