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Special Needs Estate Planning

 
A special or supplemental needs trust focuses on providing for the special needs of loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children–both now and in the future.
 
Supplemental needs trusts may also be utilized in caring for incapacitated adults. There are two types of supplemental needs trusts, first party and third party. First party trusts are those where the assets and/or income originate from the intended beneficiary. A third party supplemental needs trust is one where a separate individual desires to provide his or her assets to care for the special needs of another. Under either scenario, particular careful planning must be made to avoid the loss of governmental assistance such as Medicaid and other local supplemental programs where eligibility is determined by the recipient’s assets and income.
An Overview of Special Needs Estate Planning
Special Needs Estate Planning Online Resource Center
Calculating Your Loved One's Future Financial Needs

Special Needs Estate Planning Online Resource Center

Planning for your loved one with special needs requires extensive research to become a well-educated advocate. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. Goldsmith & Guymon, P.C. provides assistance to you and your family in addressing your unique concerns. We hope this Special Needs Resource Center provides you with a quick reference to find the additional resources you may need.

  • Social Security Resources:
    Benefits for Children with Special Needs
    Social Security Benefits Eligibility Screening Tool
  • Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, education — all without interfering with the beneficiary’s SSI, Medicaid or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer.
  • eParent.com: Online resource for the special needs community, including families, caregivers, physicians, allied health care professionals, and teachers.
  • The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
  • National Academy of Elder Law Attorneys: The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations and others who work with older clients and their families. The Academy provides information, education, networking and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
  • National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
  • Center for Parent Information and Resources: The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this list of states and territories to find the PTI or CPRC that serves your area.

Annual Disability Statistics Compendium: This publication, the first Compendium, focuses on state-level statistics published by federal agencies.

An Overview of Special Needs Estate Planning

There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special Needs Trusts.

Support trusts are more general trusts (revocable living trusts) providing for a beneficiary’s basic needs, such as food, shelter, clothing, medical care, and educational services. Beneficiaries of support trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your intended beneficiary is entitled to receive SSI or Medicaid, you should avoid a support trust.

A special or supplemental needs trust is the most effective way to help an intended beneficiary with a disability. A special needs trust manages resources while also maintaining the beneficiary’s eligibility for public assistance benefits.

As addressed above, there are two types of Special Needs Trusts: (1) Third-Party Special Needs Trust created using the assets of a third party, like a parent or spouse, as part of an estate plan and distributed by a will or living trust; and (2) Self-Settled Special Needs Trust, generally created using the disabled beneficiary’s assets to fund the trust (e.g., when the disabled person receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the self-settled special needs trust beneficiary’s death, a payback to the state is required, but only to the extent public assistance benefits were received.

Special needs trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, special needs trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.

Calculating Your Loved One's Future Financial Needs

These calculators can help you project the future expenses of an individual with special needs.

Special Needs Map from Harty Financial

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