Special Needs Estate Planning Overview
Special needs planning is all about planning for your loved ones with disabilities when in the event you were no longer there to help them. It is essential for parents of special needs children to have an estate plan in place that contemplates the needs of their children, primarily to make sure not only that they will be provided for and financially secure, but also that they will be able to keep enjoying their financial benefits from the government such as SSI or Medicaid. Failure to properly plan for these needs could result in the loss of these programs!
If you need a special needs estate planning attorney in Texas, don’t hesitate to contact Robbins Estate Law today.
Types of Trusts
While there are many types of trusts with different names, the most commonly used terms for this purpose are special needs trusts (also known as supplemental needs trusts) and support trusts.
Special Needs Trusts
For most families, a special needs trust is a “no brainer” if their child qualifies for SSI or Medicaid. The special needs trust is there to assist the child and supplement their financial needs, while at the same time allowing them to keep their government programs like SSI and Medicaid.
If your child does require SSI or Medicaid, creating a Special Needs Trust is very important.
Support Trusts
This type of trust requires the trustee to support the child beneficiary for even their basic needs, such as housing, food, education, activities, and medical care. The major drawback to these types of trusts is that the beneficiaries are not able to keep their government benefits like SSI or Medicaid.
They usually only make sense when the families have significant assets and are certain that they can provide for the beneficiary’s care for the remainder of their life without ever needing any outside financial assistance.
How Does a Special Needs Trust Work?
Through a Special Needs Trust, a parent or guardian will place their assets in the Trust rather than giving them directly to their child. This protects the child by allowing an appointed Trustee to manage funds and assets for the child while ensuring their eligibility for SSI or Medicaid.
There are two types of Special Needs Trusts. Understanding these is crucial to making the best decision for you and your loved ones.
Third-Party Special Needs Trust
This is by far the most common and beneficial type of special needs trust that parents should create for their children with special needs. It allows the family to fund the trust after they pass away through other estate planning documents such as wills, living trusts, and beneficiary designations.
Even better, if there are assets remaining in the special needs trust after the beneficiary’s passing, the leftover funds are not required to be paid back to the state and can instead be directed to other surviving family members.
Self-Settled Special Needs Trust
This is the least advantageous type of trust for a child with special needs and is usually only created when the child has directly inherited or acquired assets. The most common mistake is when a parent leaves the special needs child assets directly in a will or via a beneficiary designation.
Not only are these trusts more restrictive on what the assets can be spent for, but even worse when the beneficiary passes away the state must be reimbursed for what has been spent out of the remaining funds in the trust.
Special Needs Trusts are an essential part of your estate plan if you have loved ones with disabilities. The last thing you want to do is leave a complicated mess to your family that doesn’t accomplish your wishes of leaving assets for your disabled loved one’s needs and enjoyment.
Within a Special Needs Trust, there are various ways the money can be spent. A few examples are money from an SNT can be used for recreational activities such as travel, sports, and entertainment, or it can be used for transportation expenses, insurance, therapy, or education.
When to Set Up a Special Needs Trust
It is important to prepare for the future as soon as possible. A Special Needs Trust must be put into place before the beneficiary is 65 years of age, and there are various requirements for setting up an SNT. Whether your child currently receives disability benefits or might need benefits in the future, planning ahead ensures peace of mind for your family.
What Documents Are Needed to Set up an SNT?
When you set up your SNT with a professional attorney, you will be given the proper assistance that fits your family’s needs. At Robbins Estate Law, we will provide you with Special Needs Trust forms and walk you through the process entirely.
There are a few common documents needed to get started:
Documents:
- Last Will and Testament
- Revocable Living Trust
- Special Needs Trust
- Beneficiary Designations on All Financial Accounts
Additional Resources
Planning for your loved one with special needs requires extensive research to become a well-educated advocate. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. Robbins Estate Law provides assistance to you and your family in addressing your unique concerns.
Social Security Resources
Benefits for Children with Special Needs & Social Security Benefits Eligibility Screening Tool: These tools give better insight into what SSI is and how to utilize the benefits you and your loved ones are eligible for.
Handbook for Trustees
A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, and education — all without interfering with the beneficiary’s SSI, Medicaid, or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer.
Exceptional Parent online
Online resource for the special needs community, including families, caregivers, physicians, allied health care professionals, and teachers.
The Arc
The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
National Academy of Elder Law Attorneys
The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations, and others who work with older clients and their families. The Academy provides information, education, networking, and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
National Alliance on Mental Illness
The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
Center for Parent Information and Resources
The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this interactive map to find the PTI or CPRC that serves your State or territory.
Annual Disability Statistics Compendium
This publication, the first Compendium, focuses on state-level statistics published by Federal agencies.
Local Resources for the Austin Area
- The Autism Society of Texas, associated with the Autism Society of America, is an organization advocating for people on the spectrum. They provide valuable information to communities around Texas and host events to raise awareness.
- The Texas Aging & Disability Resource Center is a valuable resource serving cities across the state. ADRC makes finding help easy for Texans that need access to long-term services and support.
- The Adventurers Academy of Lifelong Learning in Austin, TX is a community that connects people with disabilities and provides educational and social events.