My fiance has his adult disabled brother as a beneficiary on his life insurance. I've been made aware that this could affect current government benefits (Medicaid, etc) but it's my fiance's decision. I'm wondering if his brother's social worker would be able to help him get the life insurance benefits if his brother keeps him as a beneficiary? Or could they explain how it would affect his benefits so my fiance has all the necessary information to make the right decision?
Yes, you can make a special needs trust the beneficiary of certain kinds of life insurance policies.
EW, I am going to assume that if your BF is planning on marrying you and having a family, in addition to having a policy that can provide for his brother, he (and you) will be prudent enough to take out term life insutance to provide for a situation in which one of you dies prematurely and mist raise children by themselves.
www.Bogleheads.org is a great forum for folks planning their financial future. You will get accurate answers about planning for disabled relatives there, too.
I doubt if one can be set up before the brother receives the money as a beneficiary. But its a good question to ask a lawyer.
Funerals cannot come out of the trust. Lets say brother receives 100k, out of that a prepaid Funeral arrangement should be made and paid for. The balance of the money is put in the trust.
The best thing would be to consult an attorney to do this.
The brothers Medicaid caseworker would be the person I asked about the insurance policy. How would something like this effect his Medicaid. My nephew is allowed a certain amount in the bank and a certain amount he can have in working income.
Once you get the info, then see a lawyer.