Special Needs Trusts & Disability Lawyer NJ

Serious and Nagging Questions Faced by Parents of Children with Disabilities

Who will care for my disabled child when I am no longer able to do so?

Will my own medical needs and the catastrophic costs of long-term care deplete my assets so that little or nothing will be left for my disabled child?

Can my child maintain eligibility for SSI, Medicaid, governmental services, housing subsidies and other need-based public benefits?

Planning for the Disabled

Americans are living longer than they did in years past, including those with disabilities. According to one count, 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 still depend on their parents for vital support.

When these parents can no longer care for their children due to their own disability or death, the responsibility will fall on siblings, other family members, and the community. In many cases, expenses will increase dramatically when care and guidance provided by parents must instead be provided by a professional for a fee.

Planning by parents can make all the difference in the life of a child with a disability as well as that of his or her siblings who may be left with the responsibility for caregiving on top of their own careers and caring for their own families and, possibly, ailing parents.

The Critical Component: a Plan of Care

For a family with a disabled child, estate planning usually involves providing for that child's needs without endangering eligibility for needs-based governmental benefits.

Often, parents make outright bequests to their children in equal shares, but his may be detrimental for a disabled child. An inheritance could disqualify an adult disabled child for governmental assistance. Also, the same result may occur if the disabled child is the beneficiary of a life insurance policy or retirement plan, or if the child 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 so vital to the child's continued well-being.

Supplemental Needs Trusts

Supplemental needs trusts (also known as "special needs" trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements or other funds and yet not lose eligibility for certain government programs. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining her eligibility for public benefits. As their name implies, supplemental needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life. (However, the trustee can use trust funds for food, clothing and shelter if the trustee decides doing so is in the beneficiary's best interest despite a possible loss or reduction in public assistance.)

Very often, supplemental needs trusts are created by a parent or other family member for a disabled child (even though the child may be an adult by the time the trust is created or funded). 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' Estate Plan

In order for a plan involving a Supplemental Needs Trust to work, the parents' estate plan must be modified. Any inheritance for the disabled child should be left to the Supplemental Needs Trust. Parents also must tell family members who might wish to gift or leave assets to the disabled child that they must direct all gifts and bequests for the child to the trust. Beneficiary designations on all life insurance policies, IRAs, retirement accounts, etc. must be changed so that the disabled child either does not inherit or the proceeds are directed to the Supplemental Needs Trust.

Special Needs Trusts and Disability Planning Attorney

Serious and Nagging Questions Faced by Parents of Children with Disabilities

Planning for the Disabled

The Critical Component: a Plan of Care

Supplemental Needs Trusts

The Parents' Estate Plan

Additional Information

SEARCH:

LEGAL SERVICES:

CALL US TODAY: