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Planning for a Loved One with a Disability

Our firm assists clients with disabilities with legal planning for their long-term needs, because we know first-hand what it is like to have a loved one with special needs.  Rick and Dana’s second daughter Catherine, was diagnosed at the age of 3 months with Williams Syndrome and then diagnosed at the age of 18 with Bi-Polar Disorder. We advise the parents or other family members of people with disabilities on how they can effectively provide for them, with careful regard for preserving eligibility for Medicaid and other public benefits. The firm provides information about planning options, prepares supplemental needs trusts and other documents as appropriate, and advises trustees of trusts for the benefit of people with disabilities concerning trust administration.

The purpose of a Special Needs Trust is to supplement the public benefits received, not replace them.

While you can certainly gift money and assets to those with special needs, such a gift may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs.  However, public monetary benefits provide only for the bare necessities such as food, housing and clothing.  As you can imagine, these limited benefits will not provide those love ones with the resources that would allow them to enjoy a richer quality of life.  But if parents leave any assets to their child who is receiving public benefits, they run the risk of disqualifying the child from receiving them.  Therefore, the government has established rules allowing assets to be held in a trust, called a “Special Needs” or “Supplemental Needs” Trust for the benefits of a recipient of SSI or Medicaid, as long as certain requirements are met.

A Special Needs Trust should be established no later than the beneficiary’s 65th birthday.  If you have a disabled or chronically ill beneficiary, you may want to consider establishing the Special Needs Trust at an early age.  One benefit of having the Trust in place is that if the disabled beneficiary becomes the recipient of funds such as gifts or money from a settlement from a lawsuit they can immediately be transferred to the Special Needs Trust without affecting that individual’s eligibility for government benefits.

Special Needs Trust are typically established by parents for their disabled children, any third party can establish a Special Needs Trust for the benefit of the beneficiary.  It is important to seek the assistance of a knowledgeable and experienced Elder Care Attorney when creating a Special Needs Trust.  A poorly drafted Trust can easily be subject to “invasion” by the government agencies that provide benefits.

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