Special Needs Planning
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Families with special needs children understand the importance of working together. If you are a parent of a child with special needs, you have likely become an expert at finding community resources to advocate for your child’s care and happiness, and you may worry about who will do that when you are no longer around. Thankfully, working with an attorney who understands estate planning for special needs means having to worry a little less.
One of the primary concerns of special needs planning is how to preserve access for public benefits such as Supplemental Security Income and Medicaid. A special needs trust can can provide the following benefits:
- Manage money over the lifetime of the child
- Protect the child’s eligibility for public benefits
- Plan for future funding should public benefits ever be restricted
What Are My Options for Estate Planning for Special Needs?
With the goal of caring for the future of your child in mind, you have a few options when it comes to estate planning for special needs:
1. Disinherit your child. If you simply leave nothing to your child, they will most certainly qualify for public benefits. But what would that do to their overall quality of life, and how will you feel knowing you are leaving their future in the hands of others? This option also gives your child the least amount of autonomy and ability to have a say in their own future.
2. Distribute the estate to siblings. You might consider this as an option; however, much like the previous option, you are removing the opportunity for a sense of self-reliance from your child with special needs. Unfortunately, no matter how dependable your other children are, this option also leaves a lot to chance and leaves the burden of planning their own estate on your children. This risks opening up the money intended for care to claim by creditors and their beneficiaries.
3. Leave an inheritance. While this option increases your child’s opportunity for free will and their sense of autonomy, it will also almost certainly ensure that they are no longer qualified for public benefits or that their benefits would be reduced. This means that access to helpful public services such as medical care, assisted housing, vocational and educational supports, transportation assistance and much more would be at risk.
4. Create a special needs trust. For most families, this is ideal. With a trust created specifically for caring for your child over their lifetime, your child will continue to qualify for valuable public assistance programs. A special needs trust can ensure that your child’s assets remain under the threshold of eligibility while even sometimes maintaining the integrity of your estate for other future beneficiaries.
What Are the Benefits of a Special Needs Trust?
Estate planning for special needs can be difficult. Special needs planning is first and foremost designed to benefit the best interests of individuals with disabilities. In a properly structured trust, the assets are controlled by a trustee rather than the beneficiary, meaning the state does not consider the assets when considering eligibility for assistance programs.
This means that your child can receive a supplemental income from the trust while meeting the often very low income bar for SSI, Medicaid (MassHealth) and other services. A trust can even be established after the disabled person is already in possession of their own assets.
Many government assistance programs for special needs individuals require assets not exceed $2,000 in value. In some cases, well-meaning extended family members who designate a disabled family member in their will as a beneficiary result in the disqualification from public programs. A trust arrangement can ensure that your child will not be excluded from support.
Additionally, a special needs trust can ensure the integrity of your legacy without disrupting the quality care your special needs family member requires. While it is never pleasant to think about, some parents worry about the distribution of assets after their disabled child’s death. With some trust structures, the remaining assets can be distributed to other beneficiaries, thus ensuring those you care about will continue to be cared for.
What Kinds of a Special Needs Trusts Exist?
There are two kinds of special needs trusts:
“Self-Settled” Special Needs Trust
In this kind of trust, the money that funds the trust is considered to have originated from the beneficiary’s own assets. This can be beneficial especially if the disabled person already has been left an inheritance that disqualifies them from assistance, or when illness or injury results in disability.
Sometimes, this happens when a child is the beneficiary of a personal injury lawsuit, or when an adult who once managed their own finances now requires additional care. These assets are exempt from being considered when it comes to qualifying for public assistance. However, with a self-funded trust, assets that remain at the time of the beneficiary’s death are used to pay back the government’s expenses.
Third-Party Supplemental Special Needs Trust
This kind trust can be established and funded with money that belongs to someone other than the special needs child. It allows the disabled person to remain eligible for basic care and support through public programs while holding and protecting assets for the beneficiary. This means that in the event of both ordinary and extraordinary circumstances, the assets are available.
For example, trust assets could be used to provide furniture for a child living in a group home. Alternatively, if for some reason the child would no longer reasonably qualify for a benefit program, or if the program were to be discontinued, the trust may be able to continue to fund the assistance.
Plan Your Estate with The Law Offices of Kimberly Butler Rainen
The Law Offices of Kimberly Butler Rainen understands how unique every family is — and each child. We work with families to create individualized plans that will provide the level of care and dignity every member of your family deserves, even after the parents are gone.
Contact our office today to schedule a consultation to review how you can move forward with ensuring that your family is protected.