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Special Needs Planning

Special Needs Planning

Who needs Special Needs Planning in their Estate Plan?

Whether as a result of a motor vehicle accident, workplace injury, or developmental disability, when a family member is disabled, there is an added layer of estate planning complexity. Due to the high costs of medical care, durable medical equipment, or caregivers, few individuals who are disabled can afford to pay out of pocket for these costs. Various government benefit programs, such as Medicare, Medicaid, Social Security (both Social Security Disability and Supplemental Security Income), food stamps, and HUD housing often make it possible for the disabled to avoid institutionalization and continue to live in the community.

A cornerstone of special needs planning is understanding the needs that disabled individuals will likely need to have met. These needs range from case management, medical care, social interaction, and housing options. When really good planning for individuals with special needs is implemented, each of the various needs are addressed by using a combination of public benefits and private funds to supplement where public benefits are lacking.

With continued budgetary constraints on our state and federal governments, it is becoming more important to have private funds available to supplement public aid. However, almost every program that serves the disabled also has extremely low asset limits (such as Medicaid in Missouri, which requires less than $1,000 of countable assets). The proper drafting and implementation of special needs trusts can be the perfect solution to have private funds available for the disabled beneficiary, while still maintaining eligibility for needed government aid.

Are there different types of Special Needs Trusts?

Special needs trust can be either “First-party”, which means that it is created with money or property that the disabled beneficiary either had before disability or received after the onset of the disability (such as inheritance or lawsuit proceeds), or “Third-party”, which is money that is set aside by a friend or family member for the individual who has a disability. Third Party special needs trusts can be more flexible and avoid having to “pay-back” the State after the death of the individual with a disability.

Why are Special Needs Trusts Important?

Special Needs Trust can help provide the “extras” that aren’t covered by the government programs. Examples of things can be such “luxuries” as dental care or hearing aids, clothes, funds to see doctor’s that don’t participate in the Medicaid program, home modifications, handicapped accessible transportation. It can also provide for funds for companionship, travel to see family members, and entertainment options.

Without proper planning, individuals with special needs can be forced to waste thousands of dollars, and often times be worse off than if they never had the funds. However, with proper planning, these funds can provide a terrific safety net for the individual to be able to lead an active and fulfilling life.

Contact the Weeks Group today to discuss your specific situation regarding special needs planning, and how your goals can be incorporated into proper planning!


What is the Purpose of a Special Needs Trust?

A Special Needs Trust provides benefits, through a trust, to a beneficiary who – because of financial means- would not qualify for public assistance like Supplemental Security Income (SSI) or Medicaid.

When Should a Special Needs Trust be established?

A Special Needs Trust should be set up no later than the beneficiary’s 65th birthday. If you have a disabled or chronically ill loved one, you may want to consider establishing the Special Needs Trust earlier in life. One benefit of having the Trust in place is that if your loved one should ever receive sizable gifts, bequests or a settlements, they can immediately be transferred to the Special Needs Trust without adversely affecting eligibility for government benefits.

Who can establish a Special Needs Trust?

Special Needs Trusts are commonly established by parents of disabled children, however any third party is able to establish a Special Needs Trust for the benefit of a disabled beneficiary. It is important to a qualified attorney when creating a Special Needs Trust.

Our family is wealthy, do we still need to create a Special Needs Trust?

A Special Needs Trust can help to protect your disabled loved one from potential creditors. For example, if your loved one is ever sued in a personal injury action, the assets in the trust would be unavailable for legal claims. Furthermore, because the funds in the Special Needs Trust have no bearing upon government benefit eligibility, your savings can be applied to necessary supplemental expenditures that ensure higher quality of life.