Special Needs Planning
Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf.
Special needs individuals and their families face a unique set of financial and healthcare challenges. These include: obtaining and paying for care, accessing public benefits, and protecting against predators and abuse. Having to address legal and financial issues is a distraction for many families which otherwise would be focused on providing support to their loved ones. At John Burns Estate & Elder Care Law, we have the experience and depth of resources needed to minimize these distractions and enable you to focus on the care and well-being of your loved one with a disability or special need.
Qualifying for benefits is difficult enough, but after qualifying, the last thing families want to do is to jeopardize those benefits. If assets are given to, bequeathed to, or awarded to an injured or disabled person, their entitlement to public resources may be lost or diminished. John Burns Estate & Elder Care Law can help to preserve your loved one’s entitlement to public benefits. There is no reason for a windfall to threaten benefits, which have been awarded to someone with a disability or special need. With proper planning, we help our clients to enjoy the benefits of inheritances or settlements while maintaining their public benefits.
Special Needs Trust
We often utilize a Special Needs Trust (SNT), also called Supplemental Needs Trusts, which is a highly effective means of assisting someone with an injury or disability who needs public benefits. The trustee of the SNT manages the assets for the benefit of the injured or disabled person without disqualifying the beneficiary’s eligibility for public benefits. Governmental agencies impose strict requirements upon SNT’s, so it is crucial that individuals and families considering a SNT consult experienced counsel.
Creating a SNT is only the first part of the process. The family must consider how the trust will be funded and whether assets placed in trust will be adequate to provide for the beneficiary. We regularly advise clients concerning adequacy of funding, the tax implications of funding the trust with particular assets, and other available alternatives.
There are two distinct types of Special Needs Trusts: a SNT created by a third-party and a first-party or self-created special needs trust.
Third-party SNT’s must be created by someone other than the beneficiary. They are usually created during the grantor’s lifetime or through a will. A beneficiary’s spouse is prohibited from creating a SNT during his or her lifetime, though a spouse can create a SNT through a will. In any event, distributions from a third-party created SNT should be fully discretionary to provide for supplemental care and must not be drafted to provide mandatory support.
Alternatively, a self-created SNT can help an injured or disabled person address the financial needs in excess of SSI and Medicaid benefits. There are two types of self-settled SNT’s – the d4A self-settled trust and the d4C self-settled trust – both of which permit a trust to be established with the beneficiary’s own assets without disqualifying them from government benefits.
(a) A d4A “self-settled” special needs trust is designed for a person with a disability who is under age 65 and funds the trust with his or her own assets. These trusts are useful for someone who receives a personal injury settlement or who receives an inheritance where there had been no prior planning. The d4A trust must be created by a parent, grandparent, conservator, or court.
(b) A d4C “self-settled” special needs trust is a pooled trust for a person with a disability who is of any age and funds the trust with his or her own assets. These trusts may be created by a parent, grandparent, conservator, court, or the individual with the disability either by himself or herself or through an attorney-in-fact.
In order for special needs planning to be effective, it is important to consider the individual’s and family’s unique needs and circumstances and to tailor a plan that will achieve their goals. Trusts are powerful tools for maximizing assets available for a disabled individual’s care, but setting up the wrong kind of trust can have unintended consequences. Regardless of the type, SNT’s are created for the benefit of someone who receives Supplemental Security Income (SSI) or Medicaid. Assets placed in trust are not counted as a resource for eligibility, so the trusts enable the beneficiary’s continued eligibility for benefits.
At John Burns Estate & Elder Care Law, we work with parents of children with special needs and families of adults with special needs to ensure care management. This includes naming guardians, creating trusts, choosing trustees, and finding care providers and housing as necessary. We also work with older clients with disabilities to help them gain access to public services and to provide for management of funds that they may have or receive. Our staff includes public benefits specialists and care coordinators. We help to bring the whole family greater peace of mind.