One of the greatest fears that parents and other caregivers have is the possibility that they will die without having arranged for the care of a disabled son, daughter, parent, relative or friend. Most families only have this concern until their children reach an age when they become self-supporting. However, many individuals with disabilities will never be fully capable of self-support, and their parents and caregivers will have to plan for the day when they will not be not available to provide support and care. For these families, the failure to properly plan can cause tremendous hardship for the person with the disability at exactly the time when they need the help the most: when the primary source of support, often a family member or close friend, is no longer available to provide support and care. Special Needs Planning
ensures that services and support will continue for the life of the person with the disability when the caregivers are no longer able to help. At Legacy & Trust Legal Counsel, PLLC
we appreciate the concerns facing families with a special needs child, sibling or parent. For us it’s personal. We are here to help you protect and provide for the long-term financial security of these most vulnerable family members.
The long-term financial needs of individuals with mental or physical disabilities have led to the development of trusts that can fund supplemental care and services for disabled beneficiaries without reducing their eligibility for government aid. This is especially important for individuals who might qualify for long-term care or nursing home benefits under the Supplemental Security Income or Medicaid program.
Even families that may not be interested in government benefits should consider special needs trusts. Unlike other types of trusts, special needs trusts address the specific needs of the disabled person. These trusts can be created to hire advocates for the disabled family member, provide income for education, counselling, and other comforts for your loved one including transportation, recreation, and trips or vacations. These trusts also help protect vulnerable family members from predators who might try to take advantage of them financially.
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Special Needs Trust is a trust tailored to a person with special needs that is designed to manage assets for that person’s benefit while not compromising access to important government benefits. Special needs trusts also known as supplemental needs trusts, enable families to leave money and other assets to disabled dependants without jeopardizing their eligibility for government benefits. Often eligibility for programs such as Medicaid, supplemental security income (SSI), or public housing is based in part on limited assets. Special needs trusts allow assets to be available for a disabled beneficiary without being counted for purposes of establishing eligibility for government programs. There are three main types of special needs trusts: the first-party trust, the third-party trust and the pooled trust. All three type name the person with special needs as the beneficiary. A “first-party” special needs trust holds assets that belong to the person with special needs, such as an inheritance or an accident settlement. A “third-party” special needs trust holds funds belonging to other people who want to help the person with special needs. A pooled trust holds funds from many different beneficiaries with special needs. These trusts give you the peace of mind knowing that your child or loved one will maintain the same quality of life when you are no longer able to care for them. As with any estate plan, it is critical to choose the appropriate trust that is best suited for your family’s particular situation.
At Legacy & Trust Legal Counsel, PLLC we understand that creating a trust is just the first step. Trust administration is essential to making a trust work. We continue to work with family members who are trustees to advise them on how to handle complex issues related to trust distributions, tax filings, and accounting requirements for public benefit programs.
Special needs trusts are complex legal documents governed by regulations that vary state by state. Additionally, Medicaid and supplemental security income rules regarding transfers and eligibility can cause considerable confusion. For help, please
contact Legacy & Trust Legal Counsel, PLLC today.
