If you are currently providing care for a child or loved one with special needs (such as mental or physical disabilities), you must have contemplated with concern what may happen when you are no longer able to provide and care for them.
At Phelps Law, we have enjoyed helping families plan for their loved ones with special needs for many years. Indeed, this is one of the most rewarding things that we do at Phelps Law. Our attorneys have a special interest in Special Needs Planning. Not only are we knowledgeable and experienced with Special Needs Planning, we are personally involved with various community organizations that are devoted to helping individuals with disabilities.
We understand that Special Needs Planning is about much more than documents. We take the time to learn about your loved one with special needs and explore your goals of providing for them. We know the law and the intricacies involved with Special Needs Trusts, but we also strive to go far beyond just providing a document; we custom tailor your Special Needs Planning to take into account your loved one’s needs and lifestyle so they can enjoy continuity and familiarity should something happen to you.
THE PROBLEM: DISQUALIFYING YOUR SPECIAL NEEDS CHILD FROM BENEFITS
While you can certainly leave money and assets to a special needs child in your trust or will, or by naming the child as a beneficiary on a life insurance policy, leaving a direct bequest to a special needs child may disqualify him or her from essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. On the other hand, however, public benefit programs provide only for the bare necessities such as food, housing and clothing. As you can imagine, these limited benefits will not provide your loved ones with the resources that will allow them to enjoy a richer quality of life. But if parents leave any assets to a child who is receiving public benefits, they run the risk of disqualifying the child from receiving any future benefits.
In addition, without proper planning the money or property that passes to the special needs child will be controlled by the court which results in unnecessary court costs and legal fees related to conservatorships and guardianships; not to mention, the court may choose someone who you do not trust to be the child’s guardian and conservator.
THE SOLUTION: CREATE A SPECIAL NEEDS TRUST
Fortunately, the government has created rules allowing assets to be held in a special type of trust called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI, Medicaid and other needs-based benefit programs, as long as certain requirements are met. With the proper planning, a disabled beneficiary will be able to maintain his or her lifestyle, and the property given to the special needs child will be controlled and overseen by trusted individuals who you select (rather than judges and attorneys who are unacquainted with the child’s needs).
The attorneys at Phelps Law can help you set up a Special Needs Trust so that government benefit eligibility is preserved while at the same time the special needs child can receive sufficient assets from your estate to meet his or her supplemental needs (those that go beyond food, shelter, clothing and medical care). A properly drafted Special Needs Trust can fund those additional needs. In fact, the Special Needs Trust must be designed specifically to supplement, not replace, public benefits. Otherwise, the government could attempt to seize the trust assets for repayment of services already provided or determine that the special needs child does not qualify for future benefits.
The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility such as:
- Annual check-ups at an independent medical facility
- Attendance of religious services
- Supplemental education and tutoring
- Out-of-pocket medical and dental expenses
- Transportation (including purchase of a vehicle)
- Purchase materials for a hobby or recreation activity
- Funds for trips or vacations
- Funds for entertainment such as movies, shows or ballgames
- Purchase of goods and services that add pleasure and quality to life such as computers, videos, furniture or electronics
- Athletic training or competitions
- Special dietary needs
- Personal care attendant or escort
Special Needs Trusts are a critical component of your estate planning if you have disabled beneficiaries for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with a separate asset (like a life insurance policy) or it can be a sub-trust built into your existing revocable living trust.
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