As you work on drafting your estate plan, if you have a beneficiary with special needs, you may consider putting their inheritance into a trust. You can still list them as the beneficiary, but you put a trustee in charge of making distributions, and it is the trust that owns the assets rather than the individual themselves.
One of the benefits of using a special needs trust is that it can help someone maintain benefits that they are already receiving. In this way, you avoid any unintentional consequences that could come with giving them a direct inheritance.
Passing a means test to qualify for benefits
In many cases, when someone applies for benefits, they have to disclose their income and any assets that they own. This is a means test, and the government is essentially just checking to see if they actually need to receive the benefits or not. If they report that they have a low or nonexistent income and a low level of assets, then they will qualify.
This is when a direct inheritance becomes problematic, however. It could raise their net worth high enough that they are disqualified from those benefits. They then have to spend down the entire inheritance, reapply for the benefits and hope that they are approved a second time.
But if you put the money into a special needs trust, because the individual does not own the assets directly, they still qualify for benefits. You do not have to worry about disrupting this support or forcing them to apply again.
This is just one important area to think about when making an estate plan, and it helps to show why it is so important to know what legal options you have.