Special needs planning involves helping families make proper arrangements for a child or other relative who has a disability.
OneLaw works with families to ensure that their estate planning documents provide for the particular needs and circumstances of their loved one with a disability. This may involve creating a special needs trust (sometimes called supplemental needs trusts) for a child or other relative to ensure that the child remains eligible for certain public benefits upon the death of a parent. We advise families regarding the public benefits available for persons with disabilities such as Supplemental Security Income (SSI), Social Security Disability Income (SSDI), housing vouchers, and Mass Health.
In addition, when a person with a disability receives an inheritance outright or a settlement or jury award in a personal injury lawsuit, care must be taken to ensure that person remains eligible for certain means-tested public benefits. We advise families on their options (which may include certain types of special needs trusts or other alternatives) to ensure that public benefits are not reduced or eliminated.
A “special needs trust” (also referred to as a “supplemental needs trust”) is a legal tool used by families to ensure their child has enough financial resources to meet his or her future needs without jeopardizing his or her eligibility for state or government aid. If your child already receives benefits from Social Security or Medicaid, you know they are very limited and cannot possibly cover all the expenses necessary to enjoy the quality of life you desire for your son or daughter.
Parents of special needs children should consider establishing a special needs trust which will “hold” such assets for your child without actually putting them in his or her name. The assets in the trust will then be administered by a trustee of your choosing and according to the rules you set forth in your estate plan. By doing this, your child can continue receiving necessary government resources but can still inherit from you. The trust money would then be used to enhance your child’s life. Upon the individual’s death, the remainder can go to the beneficiary of your choice, such as another child or grandchild.
If an individual does inherit money outright, then he or she can still create what is called a “payback” trust. This trust will still allow the individual to retain his or her public benefits, but the difference is that upon the individual’s death, the state will be “paid back” from the trust remainder.
ABLE accounts are a great tool for disabled individuals who do not have substantial assets and do not wish to create a trust and pay a trustee to manage funds. Contributions are limited to $15,000 per year, from any source. The maximum lifetime amount the fund can have depends on your state (i.e. $400,000 in Massachusetts, $350,000 in New Hampshire).
The individual and relatives may contribute. The individual may then use the funds for any purpose so long as it is related to the disability. None of the funds will affect the individual’s Medicaid eligibility (meaning, they are non-countable). This is a great way to pool excess SSI funds or income so that the individual’s asset limit stays below $2,000. To qualify, the individual must have been disabled before age 26.
The information you obtain at this site is not legal advice. You should consult an attorney for advice regarding your individual situation. Inquiring about our services does not create an attorney-client relationship. Do not share any confidential information with us until an attorney-client relationship is established.