Your Special Needs Child or Loved One
One of the most challenging issues facing parents who have children with special needs is planning for their child’s future without them. How will the child live when the parents die? Who will take care of the child? How will the child secure a lifetime of quality care? Where will the money come from? At the Like Law Group, we can counsel you on these issues. If you have a child, or other loved one, who has some physical or mental disability, or a chronic or acquired illness, a special needs trust may be a critical piece of your estate plan. Such a trust can protect your loved one’s inheritance and allow your loved one to receive benefits such as Supplemental Security Income (SSI), Medicaid or other government benefits. The assets in the trust can then provide supplemental care above and beyond that which the government will provide. In addition, the assets can be used to pay for items or services that will improve your loved one’s quality of life such as vacations, cultural outings, electronic equipment and entertainment. The trust can even be used to pay for an advocate for your loved one to make sure your loved one gets the benefits and care that he or she deserves.
For all parents, worrying about a child’s future comes with the territory. But for parents of children with special needs, that worry can be magnified because in many cases a disability can affect the child’s ability to become independent and financially secure as an adult. Parents of a developmentally disabled child often worry what will happen to their children after they are gone and planning for their child’s care, whether adults or minors, means making decisions that must last for the life of the child. That is why planning for your special needs child’s future after you are gone is crucial, especially in today’s climate of declining government entitlements.
At the same time, the cost of raising a special needs child can be overwhelming. Your child needs to be able to take advantage of the government programs and financial planning strategies that are available without fear that those benefits will be reduced or eliminated when you pass away. With proper planning, your legacy can be set aside to supplement governmental benefits, rather than disqualifying your special needs child from receiving those benefits.
The Like Law Group can provide you with information, support and strategies that will give you peace of mind. Implementation of such strategies, including devices such as special needs trusts, should not be left to those without special expertise in the field. Whether your goal is to preserve a legacy for your special needs child, or to shelter an inheritance or personal injury settlement from disqualifying your child from benefits, the Like Law Group is available to help you cut through the sometimes overwhelming and confusing obstacles that can prevent appropriate special needs planning.
The special needs planning process involves a number of important decisions. A trustee who is capable, trustworthy, and will be in place for the life of your child must be chosen. Parents may want to use a trust protector to oversee the trustee or a trustee advisory committee. Determining the most tax advantaged manner to provide for your child is also an important consideration. The answers you choose will vary on the legal, financial and social needs of your child. We can help guide you with the special needs planning process.
Disabled Due to Serious Injury
A permanent, disabling injury has almost as profound an effect on family members as on the disabled person. A previously independent person now has needs for medical treatment, nursing care, attendant care, and various therapies and the cost of these services can be staggering. Most families believe once a settlement or verdict in a personal injury case has been reached that all will be well with the disabled person’s finances. If you simply stop with the judgment or settlement, it is very unlikely the disabled person will be made financially whole by such a settlement or verdict.
Very few personal injury attorneys have a full understanding of our tax laws. Even less understand that some of the actions taken to maximize the value of a case result in the judgment or settlement being taxable. Most families don’t know whether to take a settlement as cash, an annuity, or some combination of the two. Without professional guidance it is hard to know what will maximize the after tax return on the settlement.
Families also need to know how to plan during the settlement process to fulfill the long deferred needs of the disabled person. A seriously injured person often needs a new home, modifications to that home a wheel chair equipped van and any number of needs that result from the injury. The settlement process should be used to plan for those needs.
Some families are never told to use a special needs trust to hold the proceeds from the judgment or verdict in order to keep their disable family member qualified for SSI and/or Medicaid benefits. Getting the largest judgment or settlement is only the first step. Maximizing the benefits of the settlement or judgment is the final goal.
Disability Due to Disease
Some adults contract a disabling disease that leaves them physically infirmed but mentally capable. These people may need to take advantage of public benefits such as SSI and Medicaid to pay for their living and medical needs. With the financial qualifications for these programs being so strict, people of even modest means may believe they have to spend themselves into poverty before they can qualify. There is a better way.
The law allows an individual to take their own money (or money they receive as a gift or inheritance) and put it into a special needs trust. The disabled individual can do this on their own if they want to join a pooled special needs trust or they can enlist a trusted family member or friend to assist them in creating their own special needs trust. Once the funds are put into a special needs trust, they are no longer countable when applying for SSI or Medicaid and are considered exempt for a person who is already receiving benefits. The money in the special needs trust can be used to pay for the needs of the disable individual as long as Medicaid is not already paying for the goods or services.
If you have any questions about special needs trusts or need guidance with the many decisions and obstacles involved in planning for the care of a disabled family member, please contact us.