We help ensure your loved ones receives all of the care and attention that their circumstances may require.
Special Needs Planning
Get the Attention & Care You Need Through Special Needs Planning
As parents and close relatives, it take a village to care for a loved one with special needs. If you have a disabled child, you recognize the importance of ensuring that he or she receives all of the care and attention that their circumstances may require.
Although you may want to leverage and utilize your assets in a manner that will enrich your child’s life, providing such considerable care and attention is very expensive. Accordingly, it is extremely important to preserve the public benefits, which may be available to him or her, either now or in the future.
A number of government programs exist to support disabled persons:
- Supplemental Security Income (SSI)
- Social Security Disability Income (SSDI)
To be eligible for some of these programs, an individual must only earn a nominal income and have few assets. The receipt of cash or other liquid resources will often disqualify the disabled person from receiving such benefits.
What Are the Benefits of Special Needs Estate Planning?
- Preserve valuable government benefits being provided to a loved one
- Avoid dissipation of assets, paying for a loved one’s medical, housing and other support needs
- Appoint a qualified Trustee to manage Trust assets and control distributions
- Ability to designate ultimate Trust beneficiaries
- Avoid estate recovery
- Allow yourself peace of mind
What Are Your Options?
For parents (or other family members) of a disabled child, there are four options with respect to estate planning as it relates to their special needs loved one:
- Disinheritance of the Child
- Distribution of Assets to an “Ordinary Trust”
- Distribution of Assets to the Child’s Sibling
- Distribution of Assets to a Supplemental Needs Trust (“SNT”) for the benefit of the child
The issue with Disinheritance of the Child is that most people want to provide for their loved one – not disinherit them. Distribution of assets to an “Ordinary Trust” will impact an individual’s right to government benefits.
Moreover, the issue with Distribution of Assets to the Child’s Sibling is that this method leaves itself open to a host of concerns including exposure to the sibling’s creditors, subjecting assets to division of marital assets from divorce, and misappropriation of the funds among others. That brings us to the final option, Distribution of Assets to a Third Party Special Needs Trust (SNT).
Distribution of Assets to a Third-Party Special Needs Trust (SNT)
The purpose of a SNT is to benefit a loved one who qualifies for means-tested public assistance programs. Trust assets are available to supplement (but not replace) the government benefits being provided. A Fendrick Morgan lawyer may suggest designing a SNT so that the funds are not considered available to the beneficiary, thus preserving the beneficiary’s government benefits.
With a SNT, not only can a disabled individual’s government benefits be preserved, but he or she can also benefit from funds, which you wish for them to receive. We can help tailor this special type of trust to suit the unique needs and/or interests of the beneficiary.
By contrast, a Self-Settled Special Needs Trust is designed when a disabled individual receives funds and the receipt of such funds would disqualify them from benefits. A Self-Settled Special Needs Trust may be established to preserve government benefits. This commonly occurs through an inheritance or lawsuit award or settlement.
Special Needs Trusts, often referred to as “Self-Settled” trusts, are funded with the beneficiary’s own assets. With a third-party SNT, the trust settlor may direct to whom the remaining trust assets are to be distributed upon the death of the beneficiary, whereas with a Special Needs Trust, the State must be designated as primary beneficiary.
At Fendrick Morgan, we believe in taking a proactive approach when planning for individuals with special needs. We carefully consider the needs of the individual beneficiary in light of the complex rules and regulations that surround these Trusts.
We want our clients and loved ones to have all the necessary documents in place to avoid jeopardizing your loved one’s present or future benefits.
Contact us today if we may support you with caring for a loved one with a special need.