Special Needs Planning

SPECIAL NEEDS PLANNING

Special needs planning involves helping families make proper arrangements for a child or other relative who has a disability. We work with families to ensure that their estate planning documents provide for the particular needs and circumstances of their loved one with a disability. This may involve creating a special needs trust (sometimes called supplemental needs trusts) for a child or other relative to ensure that the child remains eligible for certain public benefits upon the death of a parent. We advise families regarding the public benefits available for persons with disabilities such as Supplemental Security Income (SSI), Social Security Disability Income (SSDI), housing vouchers, and Mass Health.

In addition, when a person with a disability receives an inheritance outright or a settlement or jury award in a personal injury lawsuit, care must be taken to ensure that person remains eligible for certain means-tested public benefits. We advise families on their options (which may include certain types of special needs trusts or other alternatives) to ensure that public benefits are not reduced or eliminated.

Guardianships

At age 18, a child on an IEP is entitled to make his or her educational decisions. A child with a disability, however, may not be ready to make all of the choices and decisions that his or her parent had been previously making on his or her behalf. In these cases, a guardianship may be appropriate to ensure that the child’s best interest always comes first. Vulnerable adults are susceptible to external influences that may be adverse to their interest. They may be financially immature or irresponsible. Whatever the particular reason, obtaining a guardianship for your child can bring you great peace of mind. And the guardianship can be for a limited purpose, such as educational decisions only. It is important, however, that you start this process well before the child's 18th birthday as the courts (especially during COVID) can take months to schedule the hearing. Holly Lynch Law can take care of this for you.

Special Needs Trust (SNT)

A “special needs trust” (also referred to as a “supplemental needs trust”) is a legal tool used by families to ensure their child has enough financial resources to meet his or her future needs without jeopardizing his or her eligibility for state or government aid. If your child already receives benefits from Social Security or Medicaid, you know they are very limited and cannot possibly cover all the expenses necessary to enjoy the quality of life you desire for your son or daughter.


For that reason, many well-meaning parents will choose to leave their disabled child a large portion of their estate in a will, without realizing their child could lose their benefits as a result (which in the case of Medicaid, may be the only health care option available to your child).

Instead, parents of special needs children should consider establishing a special needs trust which will “hold” such assets for your child without actually putting them in his or her name. The assets in the trust will then be administered by a trustee of your choosing and according to the rules you set forth in your estate plan. By doing this, your child can continue receiving necessary government resources but can still inherit from you. The trust money would then be used to enhance your child’s life. Upon the individual's death, the remainder can go to the beneficiary of your choice, such as another child or grandchild.

If an individual does inherit money outright, then he or she can still create what is called a "payback" trust. This trust will still allow the individual to retain his or her public benefits, but the difference is that upon the individual's death, the state will be "paid back" from the trust remainder.

ABLE Accounts

ABLE accounts are a great tool for disabled individuals who do not have substantial assets and do not wish to create a trust and pay a trustee to manage funds. Contributions are limited to $15,000 per year, from any source. The maximum lifetime amount the fund can have is $400,000 in Massachusetts and $350,000 in New Hampshire. The individual and relatives may contribute. The individual may then use the funds for any purpose so long as it is related to the disability. None of the funds will affect the individual's Medicaid eligibility (meaning, they are non-countable). This is a great way to pool excess SSI funds or income so that the individual's asset limit stays below $2,000. To qualify, the individual must have been disabled before age 26.

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