SPECIAL NEEDS PLANNING
"Special Needs Planning" is the process of using legal tools and techniques to plan for the financial future and lifetime care of a child or adult with a disability. Special Needs Planning requires the application of both government benefits laws and estate planning techniques. Additionally, identifying local resources for individuals and their family members is very important, including medical, housing, educational, and social supports.
Parents and caregivers of children and adults with disabilities naturally worry about the current and future needs of their loved one. For example: Will they need constant medical treatments? Will they need to live in a group home or need their own living space? Will they need funds for education? Who will be their guardian after my death or if I become disabled myself and can no longer take care of them? Where will the funds for daily living and support come from?
A special needs plan helps to provide peace of mind for parents and caregivers regarding the future welfare of the loved one in their care. At the core of any special needs plan is a special needs trust. A will for parents and caregivers is also an essential part of any special needs plan. In addition, powers of attorney and advance medical directives are just as important if the person is of age and has the capacity to complete these documents.
A correctly drafted special needs trust ensures that current and future government benefits remain available for the individual with a disability, while simultaneously allowing the individual to fund their expenses not covered by public benefits (i.e., "supplemental needs") through distributions from the trust. It is very important for parents and caregivers of a person with a disability to direct any assets their loved one will inherit into a special needs trust. Special needs trusts are also created to collect any windfalls or other payments an individual with a disability may be entitled to from, for example, a personal injury settlement. Additionally, special needs trusts are utilized to receive funds gifted by family and friends.
A will can appoint a guardian (or guardians) for a child with a disability should both parents pass away. A will also provides the necessary legally-binding document for transferring assets to a person with special needs upon the parent's/caregiver's death. If you die without a will, Maryland law requires your probate assets to be divided between your spouse and your children, if married, and equally among your children, if unmarried. Distributing assets in this manner may create serious problems regarding benefits eligibility for a person with a disability, including coverage for medical care costs. As discussed above, it is important to direct any inheritance intended for an individual with a disability into a special needs trust. A special needs trust can be drafted directly into a will document to preserve the beneficiary's eligibility for government benefits, while also allowing them to receive and enjoy their inheritance.
FOR INDEPENDENT ADULTS WITH DISABILITIES:
Many adults with disabilities are capable of making their own planning decisions and have concerns specific to their own situation. Assets received from inheritances, personal injury awards, or other means can create negative consequences for individuals with disabilities related to eligibility for government benefits, such as Medicaid and Supplemental Security Income (SSI), and assistance from private or charitable organizations.
The planning tools discussed above should also be utilized by independent adults with disabilities in their planning. Importantly, Special Needs Trusts can be drafted to protect eligibility for government benefits and other assistance, while at the same time providing supplemental funds for expenses not covered by the benefits and assistance received.
To schedule a free consultation, call (240) 707-9190.