Attorney Mary Markovich
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Special Needs & Disability Planning

Assisting Families with a Special Needs Questions:

1. Who will care for your specials-needs dependent when you are no longer able to do so?
2. Will your own medical needs and the catastrophic costs of long-term care deplete your assets so that little or nothing will be left for special needs care?
3. How can you leave an inheritance to a loved one and still permit the loved one to maintain eligibility for SSI, Medicaid, governmental services, housing subsidies and other need-based public benefits for your dependent?

Planning for the Disabled
It’s a fact that Americans are living longer than they did in years past, including those with disabilities. According to one report, 480,000 adults with mental retardation are living with parents who are aged 60 or older. This figure does not include adult children with other disabilities and those who live separately, but who still depend on their parents for financial support.

When individuals with Special-Needs cannot be cared for at home because the caregivers have their own disabilities or in event of the caregiver’s death, the responsibility for caregiving may become the responsibility of siblings, other family members, and the community. In many cases, expenses will increase dramatically when care and guidance must be provided by any professional for a fee.

Planning by parents can make all the difference in the life of a a special-needs dependent with a disability as well as that of his or her siblings who may be left with the responsibility for caregiving, in addition to their own family responsibilities and careers.

Special Needs Plan of Care
For a family with a disabled minor or incapacitated dependent, estate planning usually involves providing for that individual’s needs without risking eligibility for needs-based public benefits.

Often, parents make outright bequests to their children in equal shares, but his may be detrimental for a disabled child. An inheritance, personal injury settlement, or a divorce settlement could disqualify an adult disabled child for governmental assistance. Disqualification may occur if the disabled person is the beneficiary of a life insurance policy or retirement plan, or if the person owns an account jointly with another.

A trust provides a much safer vehicle for providing funds to care for a disabled heir. The Trust will protect assets from the claims of creditors and should, if properly drafted, allow the child to continue to qualify for the governmental assistance, which are fundamental for continued quality of life.

Supplemental Needs Trusts
A Supplemental Needs Trusts, which is also known as "Special Needs" Trust is a type of Trust designed to protect the assets of the person with a disability. A Supplemental Needs Trust is used to supplement but not replace public benefits, such as Supplemental Security Income (SSI) or Medicaid and permits a Special Needs beneficiary to receive proceeds from lawsuit settlements, gifts or bequests, or other funds, without losing eligibility for certain government programs. This type of Trust is drafted so that the funds will not be deemed to belong to the beneficiary, when the governmental agency is determining eligibility for public benefits. The Supplemental Needs Trust is not designed to provide basic support; it is established to pay for items to maintain quality of life that could not be paid for by public assistance funds. A Supplemental Needs Trust can pay for things such as, education, recreation, counseling, and medical attention beyond the simple necessities of life. At the Trustee’s discretion, the Trust funds may be used for necessities, such as for food, clothing and shelter if the Trustee decides it is in the beneficiary's best interest to so, even if there may be a possible loss or reduction in certain public assistance benefits.

Often, supplemental needs trusts are established by a parent or other family member for a disabled minor or dependent . Such trusts also may be set up in a will as a way for a family member to leave assets to a disabled relative. In addition, the disabled person can often create the trust him/ herself. These "self-settled" trusts are frequently established by individuals who become disabled as the result of an accident or medical malpractice and later receive the proceeds of a personal injury award or settlement. Each public benefits program has restrictions that the supplemental needs trust must comply with in order not to jeopardize the beneficiary's continued eligibility for public benefits.

The Parents' Revised Estate Plan
For a plan involving a Supplemental Needs Trust to be effective, the parents' estate plan must contain certain specific provisions. Any inheritance for the disabled child should be left to the Supplemental Needs Trust. Parents also should discuss with family members who might wish to gift or leave assets to the disabled child that a Special Needs Trust has been established to receive any and all gifts and bequests for the dependent. Beneficiary designations on all life insurance policies, IRAs, retirement accounts, etc. must be changed so that the proceeds are paid to the Special Needs Trust.

The Law Offices of Attorney Mary Markovich, PA can assist clients in establishing a Special Need Trust and Plan for Care for their loved ones with special needs.