Featured In:
The New York Times
Fox News Channel
US Today

Special Needs Planning

Special Needs Planning

As the parent or caregiver of a special needs individual you likely already understand the various practical and emotional challenges presented by caring for a special needs child. The financial cost of providing for a special needs individual can also be great. Chances are there is or will be someone in your family--child, grandchild, nephew, niece, parent, or grandparent--who will need long-term help managing personal care and/or finances. To ensure that your loved one continues to receive the care he or she needs and deserves after you are gone it is important to include special needs planning in your overall estate plan now.

A child with special needs will eventually become an adult with special needs. Though many special needs individuals are able to live fulfilling, relatively independent lives, even a high functioning special adult will need specialized care and assistance for life. To alleviate some of the financial burden of caring for a special needs individual, most families count on assistance from programs such as Medicaid and Supplemental Security Income, or SSI. State and federal assistance programs, however, have income and asset limits that cannot be exceeded. For this reason, care must be taken when providing for a special needs loved one in an estate plan.

Well-meaning family members often make the mistake of leaving gifts in a Last Will and Testament to special needs individuals with the intention of contributing to the individual’s care and maintenance. Though well-intentioned, a direct gift such as this can cause the recipient’s countable assets to exceed assistance program limits. To ensure that you do not make this mistake, special needs planning should be an integral part of your estate plan.

In the past, families would disinherit disabled family members and leave assets to someone else who agreed to “take care” of them. If assets are left to a disabled beneficiary, it could disqualify them from the state or federal programs they are receiving. In 1993, Congress enacted new laws that entitled disabled individuals to derive the same estate planning benefits as non-disabled individuals. The law created Supplemental Needs Trusts, which enable you to leave any amount of money to a loved one who has special needs without affecting their eligibility for the state or federal benefits they receive.

To protect your special needs loved one’s eligibility for federal and state benefit programs a special needs trust can be created which can hold assets left for the individual’s benefit. Also referred to as a “supplemental needs trust”, when drafted properly a special needs trust will not jeopardize the beneficiary’s eligibility for assistance from programs such as Medicaid and SSI. Trust assets are intended to supplement assistance provided by these programs and may be used for things such as:

  • Annual check-ups at an independent medical facility
  • Supplemental education and tutoring
  • Out-of-pocket medical and dental expenses
  • Transportation (including purchase of a vehicle)
  • 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: computers, videos, furniture, or electronics.
  • Personal care attendant or escort

Careful planning is necessary to craft a plan that will supplement government benefits that are worth preserving, is flexible enough to adjust to changes in future benefits, will preserve and expand assets, will make sure this person receives proper care, and may even save taxes.

When Do I Need Guardianship for My Special Needs Child?

As a parent of a special needs child, you are the child's “natural guardian” and can make all decisions regarding the child. However, your rights as guardian do not allow you to have access or control of your child's assets (i.e., proceeds from a lawsuit or gifts from a family member). In addition, when your child reaches the age of 18, you lose your rights as the natural guardian to make healthcare and other life decisions for them. To maintain these rights, you must commence a guardianship proceeding or the State will assume legal authority over your disabled loved one. To avoid losing your authority, you should contact a qualified attorney to begin a guardianship proceeding at least six months prior to your child's 18th birthday.

To be recognized as a special needs trust a trust must include very specific language and follow federal guidelines. The estate planning attorneys at Sowards Law Firm have the experience required to ensure that your trust will function as intended, thereby ensuring that your special needs loved one is protected and well cared for long after you are gone. To get started on your special needs plan, please contact our firm today by calling (408) 371-6000.

Client Reviews
I really appreciate the time spent in explaining the process of preparing a Living Trust; the professionalism and friendliness of everyone! I also appreciate the presentation of the materials both binder/print and soft copies. I highly recommend Sowards Law Firm. Karen O'Brien
Ben and team recently helped us with a new estate plan. Their service was timely, thorough, and very professional. They patiently explained concepts we were unfamiliar with. We were very satisfied and recommend their firm without hesitation. Brian Giambattista
Ben was very professional & knowledgeable when tailoring the needs of my end of life documents. I have utmost confidence in his abilities and have no hesitation recommending him for estate management. Janet Burks Giambattista