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Long-Term Planning For Loved Ones With Special Needs

Among the many challenges facing parents of children with special needs is planning for the time when the parents will no longer be able to act as the primary caregivers. Proper planning can make all the difference in the life of a child with special needs or disabilities, as well as in that of his or her siblings who may ultimately assume the caregiver’s responsibilities.

The disabled individual’s receipt of an inheritance, gift, lawsuit settlement, judgment, or personal injury recovery could exceed the allowable resource limit and disqualify them for both SSI and Medicaid without proper planning. By maintaining eligibility for SSI and Medicaid an entire system of state services for social programs, residential alternatives, rehabilitation, case management and health care can be preserved.

Other individuals needing asset protection in order to qualify or maintain their eligibility for certain governmental benefits are those of all ages receiving personal injury settlements or judgments.

A properly drafted Special Needs Trust (also known as “Supplemental Needs” trust) will allow a disabled beneficiary to receive money and assets and not jeopardize their eligibility for certain government programs. If properly drafted and administered, a Special Needs Trust should not be a countable resource for SSI or Medicaid eligibility, should not trigger the transfer of asset penalty provisions and should not affect the amount of needs-based governmental benefits available to the beneficiary.

As their name implies, Special Needs Trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that will not be paid for by public assistance funds. They are designed to supplement, rather than diminish, needs-based public benefits, such as SSI and/or Medicaid.

Special needs encompass not only medical and health care services and products which may benefit a disabled individual, but also a wide range of related services and “quality of life” options that are unique to the beneficiary’s particular circumstances and goals. Some of the self-esteem and quality of life enhancing expenses include clothing, training and education, insurance, recreation and vacation, counseling and desirable equipment such as a specially equipped van.

Types Of Special Needs Trusts

Generally, there are two types of Special Needs Trusts: a Self-Settled Special Needs Trust and a Third Party Special Needs Trust.

A “Self Settled” Trust is when a disabled individual transfers his own assets to a trust for his/her own benefit. These trusts are frequently established by individuals who become disabled as a result of an accident or medical malpractice and receive a personal injury settlement.

A “Third Party” Special Needs Trust is created and funded by a third party with his/her funds, typically a parent or grandparent, for the benefit of a child or grandchild with special needs (even though the child may be an adult by the time the trust is created or funded). These trusts are typically testamentary trusts or “stand-by” trusts which will be funded by a will bequest or as the designated beneficiary of non-probate assets.

Most importantly, Special Needs Trusts can help parents coordinate their estate plans and provide peace of mind that their child will be provided for in accordance with their wishes.

Contact Theresa A. Barnatt For A Consultation

We recognize that planning for the future of your child or other family member with special needs is important to you and we welcome the opportunity to meet with you and establish a plan that will meet your needs and desires while maintaining eligibility for public benefits. To make an appointment at our Lake Charles law office, contact us by calling 337-436-8401.