SPECIAL NEEDS PLANNING
From helping a young family put in place a special needs trust to which grandparents can contribute, to evaluating guardianship and its alternatives for a young person approaching 18, to evaluating savings options like ABLE Accounts, to advising on public benefits eligibility requirements, we can help at every stage of your loved one’s life. We’re here for you now, and we will be there for them later.
Parents of a child with special needs want the same things for their children as other parents:
meaningful and productive activities
the company of caring people,
a safe home
the opportunity for self-expression
some degree of independence
advocates on their behalf
The Life Cycle Approach
For special needs planning, we can assist you in every stage of your loved one’s lifetime to help you put in place a plan that will carry on for your child after you are gone. Through all life stages we can help connect you with resources in the local community and nationally for services, supports and reliable information for your child or other family member with special needs.
We help our clients prepare for their child’s future by helping create a private assistance system to complement public benefits, such as Supplemental Security Income (SSI), Medical Assistance (also known as Medicaid), and the many home and community based waiver programs, such as the Community Pathways Waiver. These are among the most important public benefits programs that apply a financial test for eligibility. These programs strictly limit the amount of resources that an individual may have in her own name; currently, this is $2,000. Certain resources are not included in this limit, for example, one’s personal effects, vehicle, home and prepaid funeral plan are generally not countable for these programs. Cash, stocks and bonds, the cash value of certain life insurance policies, and retirement accounts are all examples of resources that are countable.
You can see that if you want to leave money or property to a loved one with a disability, you must plan carefully, otherwise, you could jeopardize his ability to receive important public benefits. For example, if you leave your loved one $10,000 in cash, that gift would disqualify him from receiving SSI, and risk the loss of Medical Assistance or waiver eligibility until the funds are spent down or placed in an exempt type of trust or an ABLE account. By creating a third party special needs trust (that is, one that is funded with assets that belong to someone other than the beneficiary) or contributing to an ABLE Account, you can protect the funds from being counted for purposes of these benefit programs.
We can help you evaluate the different ways to protect assets and select the option that works best for you and your family member. Factors we discuss with you include the rules and procedures that may apply to different trusts and ABLE Accounts, whether or not the State has a right to funds remaining after the beneficiary dies, how funds in the trust or ABLE Account may be used without affecting benefits eligibility, and the relative costs of each option.
We will discuss with you how to fund the trust or ABLE Account, and can coordinate with your financial advisor to ensure that beneficiary designations are updated for your retirement accounts, life insurance policies and other financial assets that pass to the next owner in this manner, and these assets get into the trust after your death.
If your family member has assets of her own that may make her ineligible for public benefits, then a first party special needs trust or an ABLE Account may be an effective planning tool, if the amount is too great to be able to spend down in a reasonable manner. A first party special needs trust (that is, one that is funded with assets that belong the to beneficiary) has many strict requirements. Chief among these is the requirement to repay, after the beneficiary dies, all states that have provided the beneficiary with Medicaid benefits during her lifetime, up to the amount of funds remaining in the trust. ABLE Accounts have a similar requirement, however the payback period is limited to the amount of benefits provided after the ABLE Account is funded.
You or a family member may have already established a trust but are unsure of how it works, how to fund it, how it will affect your loved one’s benefits eligibility. You may have been appointed as a trustee of a trust and are unsure how to go about carrying out these responsibilities. We will help to review the trust and evaluate its effect on current benefits, suggest changes if appropriate, and assist in getting the changes implemented, either through an amendment or seeking court approval to change the trust. We can advise you as trustee of your role and responsibilities.
A fiduciary is someone to whom property is entrusted for someone else’s benefit, in other words a person responsible for taking care of someone else’s money or other property. Choosing the right fiduciary, whether a person or an entity, to be the trustee is one of the most important decisions you will make.
The trustee of a special needs trust will have complete control over the trust property and will be in charge of investing and spending money on your loved one's behalf; the legal term for this type of control is “discretion” and special needs trusts are often referred to as “discretionary” trusts. Because your loved one will have no control over the trust monies, SSI and Medicaid will not count the trust property for program eligibility purposes. But even more importantly, a special needs trustee must also be an advocate for the beneficiary, be sensitive to the beneficiary’s unique needs, and also be mindful of the beneficiary’s public benefits and their rules.
You may want to have family members involved in your loved one’s future planning, and serving as trustee may be a good way to accomplish this. However, not everyone is cut out to be responsible for large sums of money, or the regular obligations of serving as a trustee. Sometimes there are other roles that may be a better fit, such as serving as a co-trustee with a corporate trustee, or as a trust protector with certain limited although powerful responsibilities, as guardian of person, or simply as a loving sibling or family member. We can help you understand the different roles that family members can play, and also help you find other resources for support and advocacy for your loved one if there are no family members who can take on these roles.
Your decisions about fiduciaries may evolve over time, as your financial picture changes, relationships with certain individuals change, someone you have named dies or becomes incapable of serving, or younger family members or friends grow into these responsibilities. It is wise to review your fiduciary appointments from time to time, so that you can make adjustments as needed.
For many people with disabilities, access to public benefits such as SSI, Medicaid and especially Medicaid waiver programs that can provide housing, attendant care, day programs, employment supports and other services, is critical to their well being. We can help plan for financial eligibility for such programs by evaluating what assets are countable, the options for spending down or use of trusts or an ABLE Account to preserve funds, and how to accomplish these planning steps.
If the individual is capable of making financial decisions independently, we can work with him or her directly; if the individual lacks capacity to make decisions or appoint an agent under a power of attorney, it may be necessary to go to court for proper authority for certain financial transactions, such as transferring assets into a trust.
We can help you prepare for the application process and gather the documentation needed. We can help you locate additional resources in the event benefits are denied or terminated.
For some individuals, changes in a parent’s circumstances may result in a change in benefits eligibility. Specifically, if an individual is disabled before the age of 22, is receiving SSI, and is not capable of working full time, when her parent begins to collect Social Security due to retirement or disability, or when the parent dies, that individual may be able to collect Social Security Disability Insurance (SSDI) under the parent’s work record.
For special needs planning, we can assist you in every stage of your loved one’s lifetime to help you put in place a plan that will carry on after you are gone. Through all life stages we can help connect you with resources in the local community and nationally for services, supports and reliable information for your child or other family member with special needs.