Special Needs Planning

special needs planningParents of children who have special needs want to provide their special needs children with the best possible care, which includes a lifetime of financial support.  Although most parents of special needs children never expect their child to be financially independent, many parents do not know how to properly plan for their child’s future.  To this end, there are many government benefits available to people with special needs, such as Medicaid and Supplemental Security Income (SSI).

These types of government benefits are “needs based.”  That is, once the person receiving the government benefits surpasses certain income and asset limits, he or she will no longer be eligible for those benefits.  Therefore, assets or an inheritance given to people/children with special needs could cause that person to lose those needed government benefits

Some parents believe that they can simply get around this problem by disinheriting their special needs child, and leaving assets to another family member or trusted individual, with the understanding and hope that the assets will be used for the benefit of the special needs child.  However, such a strategy should be avoided for the following reasons:

  • There is no guarantee that the monies left to the trusted individual will be used for the care of the special needs child;
  • Monies left to the trusted individual may be lost to the individual’s divorce, lawsuits, or even bankruptcy;
  • If the trusted individual dies before the special needs child, monies that were intended to be used for the special needs child’s care may by inherited by the heirs of the trusted individual; and
  • The trusted individual may inadvertently cause the special needs child to lose his or her government benefits due to an improper distribution because the trusted individual is not familiar with the rules regarding the government benefits.

The use of a Supplemental Needs Trust can ensure that assets left to your special needs child can be used for his or her benefit, and at the same time, ensure that he or she will not be disqualified from receiving needed government benefits.

In addition, the Supplemental Needs Trust governs the types of distributions that can be made for the benefit of the special needs child, so as to not run afoul of the complex rules of the government benefits.  Essentially, the Supplemental Needs Trust is used to supplement, but not supplant government benefits.

Beneficiaries who have a disability and who directly receive an inheritance risk losing their government benefits.  With the fear of jeopardizing their loved one’s qualification for government benefits, many people leave their assets to someone else, hoping that it will be used for their loved one’s care.  Our planning can allow your assets to enhance your disabled loved one’s quality of life, without jeopardizing their qualification for government benefits.  Most importantly, you will have the comfort of knowing that your assets will be governed by a legal document to ensure that it is used for your disabled loved one’s care.