Quick Bites: Special Needs Planning

If you have a loved one with special needs, you know that caring for him or her can, at times, feel totally overwhelming. Presumably, you have retained an attorney to guide you through the special education process in your district. Now it is time to consider meeting with a special needs planning attorney to ensure that your estate planning is done in a way that protects your child with special needs (as well as any other children you have).

First and foremost, you need to know that even though your child has a disability, he or she will become an emancipated adult at the age of 18. This means that he or she can make his or her own decisions without you, and this is not always appropriate depending on the child’s needs. If the child has capacity to make his or her own decisions, he or she can sign a Power of Attorney and Medical Directive to appoint an agent (presumably you) to assist in making financial and medical decisions on his or her behalf. If the child does not have capacity, then you will need to consider a guardianship proceeding so that you can be appointed as the child’s legal guardian.

The Importance of a Special Needs Planning Attorney
In addition, and maybe more commonly recognized, if your child cannot live independently, there is a good chance he or she will require means-tested government benefits at some point. Many private health insurance plans allow for a disabled child to maintain medical coverage until the age of 26 (and in some cases until age 31), but after that, your child will be without health insurance. It is important to speak with a special needs planning attorney to explore the various health insurance programs that may be available to your child (including Medicaid), as well as other government benefits for which he or she may qualify (such as Supplemental Security Income or Social Security Disability). Medicaid, SSI and SSDI all have their own rules, regulations, and eligibility criteria, so it is important to speak with someone well versed in not only how to qualify but also what each program will cover.

Medicaid and SSI are both means-tested benefits, which means that the government dictates how much your child can have in resources in order to establish or maintain eligibility for benefits. Of course, your estate plan has a direct impact on this, especially if you plan to leave any money to your disabled child. A special needs planning attorney can guide you through the ways you can provide for your child without adversely impacting his or her future eligibility for these programs. The primary planning tool for you to consider is a Supplemental Benefits Trust (or Supplemental Needs Trust, depending on your state). This is a trust that will be funded by you and any other family members that, if properly drafted, will not impact your child’s eligibility for means-tested benefits. The trustee (which will be the person or organization responsible for managing and administering the funds you leave in trust for your child) will be directed to use the funds in a way that supplement, but do not supplant any means-tested government benefits (for example, the trust can pay for the child’s trip to Disney, but not for the therapist that Medicaid is covering). These trusts must be very carefully drafted and very carefully administered, so it is extremely important that you meet with an attorney who understands special needs planning and has the proper network of advisors for you (such as wealth management advisors, insurance advisors and the like).