Zaremba Center for Estate Planning & Elder Law

Yikes, My Special Needs Child is Turning 18!!

Parents of a special needs child have a big decision to make as their child approaches the age of 18:  does my child needs a guardian, or do they need a power of attorney?

If you have a child with special needs, once they turn 17, you need to start thinking about what's going to happen when they turn 18 and you are no longer legally in control of their life.

You should identify the support required for your child and ask what other support they need, while they’re transitioning. Work with a special needs attorney and ask about Guardianship and Conservatorship. Guardianship is a way to protect an individual who can’t take care of herself especially when making an informed decision about their healthcare decisions.  In Virginia, unlike many states, financial decisions are made by a court-appointed Conservator.  An experienced attorney will explain Guardianship, Conservatorship, and alternatives that may be chosen if the child is capable of making some, but not all, decisions on her own. 

A person can be disabled in some ways, but still be competent to execute the powers of attorney. If the person understands who their family is, who she is, if she’s oriented to time, and she knows who they trust to handle their business or health care decisions, then she can probably sign powers of attorney.

A POA is written authorization to represent a person and make specific decisions on her behalf. The child may have a POA over her health care and a POA that governs her financial decisions whereas a court appointed Guardian makes a disabled child’s healthcare and a  court-appointed Conservator manages their financial assets. The court makes a decision to appoint these roles after reviewing physician statements about the disabled person's needs.  If your child's financial resources during their lifetime is unlikely to be that the SSI they qualify for as disabled adult, then you need not serve as a Conservator rather you would want to apply to be your child's 'representative payee' via the Social Security Administration.  This is a welcome alternative that is important to know about because a Conservator  must file a annual report to the Commissioner of Accounts which must be accompanied by an onerous fee! 

Remember that having power of attorney over a child's financial matters doesn't give parents power over everything. Obviously, financial powers  not covered in the POA document are things over which the agent doesn't have the authority; so make sure the document is drafted by an attorney that specializes in special needs planning. Another important consideration, is that POA can be revoked, if  the person who has made the appointment is has the capacity to revoke the document whereas a Guardianship/Conservatorship cannot be revoked by the special needs person until the court determines otherwise.

Reference: Effingham (IL) Daily News (April 15, 2018) “Teaching parents about guardianship of disabled children”

 

 

How to Contest a Conservatorship/Guardianship Appointment

This is the second installment of a two-part series on the Conservatorship/Guardianship process.  My blog on December 19th pointed out how flawed the system is whereas this and yesterday's blog will provide you with vital information on how to go about avoiding and perhaps even defending yourself if this event were to come your way.

The two main reasons why people contest guardianships are because they do not feel the person is incapacitated or they think someone else should serve as the guardian. If you or a loved one is facing the possibility or reality of a guardianship, you need to know how to contest a guardianship.

Contesting the Guardianship

There are several tactics for fighting a guardianship, depending on whether you are challenging the person’s need for a guardian or the choice of who will serve as guardian. The senior can try to prove to the court that she is capable of making decisions for herself and she can communicate those decisions. She can argue that the person advocating for the guardianship has not provided clear and convincing evidence to the contrary.

If the problem is not whether your aging loved one needs a guardian, but rather, who will serve as guardian, you can contest the fitness of the person who is asking the court for appointment as guardian. These contests can get quite nasty since they usually become personal attacks that air private information in a courtroom. You should get as much evidence as possible to show that the proposed guardian is not fit to serve. Financial mismanagement, domestic violence or an improper motive for seeking control of the ward, can cause a judge to refuse to appoint an individual as a guardian. You can ask the court to appoint an organization or agency rather than a person as the guardian.

What the Court Must Find to Grant a Guardianship

A guardianship is a two-step process. First, the judge must decide, based on clear and convincing evidence, that the person does not currently have the capacity to make or communicate appropriate decisions about her welfare. The inability to make the right choices can be the result of dementia, cognitive impairment, injury or illness. The inability to communicate decisions can result from being in a coma, having paralysis, losing speech and language processing due to stroke, or one of many other conditions. When the judge determines the person cannot make or communicate decisions, the person is then legally incapacitated and is a "ward".

The court must then decide who would be an appropriate guardian for the ward. Once declared incapacitated, the ward can no longer enter into valid contracts or make other binding financial decisions. The court must appoint someone who will be responsible for handling those arrangements for the ward.

When the Ward Contests the Guardianship

Some elderly relatives will fight a guardianship because they do not want to give up control or they have a mental health issue that causes them to be paranoid and distrustful of everyone. This type of senior might sound articulate in court, even if he makes poor self-care decisions out of court. When the person over whom people are trying to get a guardianship fights the process, it can be difficult to get the judge to order in favor of guardianship.

Adult children sometimes have to face the unpleasant task of considering whether an aging loved one can take care of himself. The senior might be suffering from Alzheimer’s or some other form of dementia, or may have cognitive impairment from some other cause. In some situations, a guardianship is needed to protect the senior from exploitation, abuse or neglect. The decision may come down to the safety of your loved one.

This posting discusses the general law. The laws may be different in your state, so be sure to talk with an elder law attorney in your area.

References:

American Bar Association. “He ain’t heavy, he’s my brother: Contested guardianships and interstate guardianship issues.” (accessed November 29, 2017) https://www.americanbar.org/content/dam/aba/events/real_property_trust_estate/symposia/2011/rpte_symposia_2011_m2935_te_contested_guardianships.authcheckdam.pdf

Legal Aid Center of Southern Nevada. “Objecting to a Guardianship.” (accessed November 29, 2017) https://www.familylawselfhelpcenter.org/self-help/guardianship/objecting-to-a-guardianship

New Yardstick Makes a Guardianship Unwarranted

A New York Surrogate’s Court judge has denied a request to appoint a guardian for a 34-year-old woman with Down syndrome, citing potential human rights threats from overly-restrictive court interventions in the lives of people with disabilities.

Let’s call this 34 year old woman with Down syndrome "Michelle M." Remarkably, she proved she could safely and productively live on her own with weekly supervision from a disability services worker and the help of her friends and family.  This is a big deal folks!  This is demonstrable proof that the early educational interventions we are providing to children with disabilities are working in the way they were designed to.  Let’s hope Michelle M. is just one of many children with disabilities to come that find they was to productive, independent lives. 

Brooklyn Surrogate Margarita Lopez Torres denied a petition filed by Michelle's parents, who asked the court to appoint a plenary guardian under Article 17-A of the Surrogate's Court Procedure Act. Doing so would completely remove their daughter’s legal right to make decisions about her own affairs and would give the guardian total control over her as a disabled person.

The judge said courts must exercise the “utmost discretion” when weighing a guardianship petition. Courts should instead look to impose the least-restrictive terms of oversight. Lopez Torres said the presence of a disability such as Down syndrome doesn’t necessarily form a basis for an individual's guardianship appointment under the Act. To the contrary, depriving disabled people of liberties under an unjustified guardianship is against international human rights conventions, the Americans with Disabilities Act, and the U.S. Supreme Court decision in Olmstead v. L.C.

The judge commented that she's hesitant to apply 17-A partially due to the fact that the statute doesn’t allow courts to limit the scope of the authority afforded to guardians—the guardianship can’t be tailored to the affected individuals.

Lopez Torres described Michelle in her opinion as "vibrant and engaging" and someone who has lived independently since 2008 with two roommates in a publicly-supported apartment. She’s able to conduct her day-to-day life well, including banking, shopping and—until her employer recently moved away—keeping a part-time job in a cellphone supply store, the judge said.

Reference: New York Law Journal (July 27, 2016) “Noting Human Rights Concerns, Judge Denies Guardianship to Parents of Disabled Adult”

 

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Savings Plan for the Disabled

As more and more states implement the federal provisions available to them under 26 U.S. Code §529A, ABLE accounts are back in the news.

 

While an ABLE account isn’t exactly a 529 plan, the provisions that make these accounts possible are found in that section of the U.S. Code. In writing legislation designed especially for individuals with disabilities, Congress simply went back to the provisions already written in U. S. Code §529, inserted new provisions for these accounts, added an A to 529 to distinguish them from the other type of 529 accounts this code section allows and presto change-o: the ABLE tax-free savings accounts were born.

President Obama signed this legislation known as ‘Achieving a Better Life Experience’ (ABLE) Act in 2014 as part of the Tax Increase Prevention Act of 2014.  As mentioned, the law allows qualified individuals with disabilities to have tax-free savings accounts in which they can save up to $100,000 without jeopardizing eligibility for Supplemental Security Income (SSI) and other means-tested government programs like Medicaid. SSI benefits are suspended for individuals whose accounts are over $100,000, but their Medicaid benefits will continue. However, because the federal legislation simply allowed for each individual state to enact its own legislation, these regulations and provisions from the states has been slow to materialize.

ABLE accounts are actually more permissive than 529 plans in that the funds in these accounts can pay for more than just education - health care, transportation, housing, etc., are all among the additional permitted uses of these accounts. However, to qualify, an individual has to have a disability that happened prior to age 26. Also, each individual with disabilities may have only one ABLE account, and the annual contributions are capped at the federal annual gift tax exclusion. That’s $14,000 this year.

Any funds that remain in the account when the account beneficiary dies must first be used to repay Medicaid for expenses incurred on behalf of the beneficiary  giving those caring for special needs loved ones another tool in their arsenal.  Obviously, the establishment of so-called first party or D4a Trust is not needed if the initial contribution to the account will not exceed the amount allowed under the Act making disability planning with a ABLE account a lot more cost effective.  The pay-back requirement of these accounts however, will continue to make the creation of third-party special needs trusts more attractive since these trusts have no such requirement.

States can offer these types of plans to people with disabilities, but they first must adopt regulations before financial institutions can offer the plans. Right now, Ohio is the only state in the country that currently offers such a plan, but Virginia did enact the ‘Virginia Achieving a Better Life Experience’ (ABLE) bill during the 2015 session and the state agency financial institution that will establish the regulations for these accounts, known as Virginia529,  expects to complete their work and offer the first of these accounts by the end of this year.  In trying to describe the challenges such planning requires, Virginia529 tells us that “designing and implementing a flexible, affordable, easy-to-access savings program with appropriate, quality investment options takes considerable time and resources. Virginia529 will work as quickly as possible to coordinate regulatory, operational, programmatic and investment option issues required to get the program running”.

It will still require the advice of an experienced estate planning attorney, familiar with the intricacies of both special needs trusts and ABLE accounts to guide clients so that the best plan for their loved one is achieved.  For more information go to our website or register online for one of our workshops on this topic.

Reference: NJ101.5 (July 1, 2016) “Special accounts for the disabled”

 

Private Public Partnerships Can Be Bad Business

When private companies try to make a profit by providing a public service, it can spell disaster for the citizens they are supposed to be serving.

The worst examples of these disasters have taken place in those towns and cities that have allowed private business to run their Emergency Management System.  Try calling 911 when the company has just filed for Chapter 11 bankruptcy; one Tennessee woman literally died waiting for help to come.

All of us count on our government to provide certain essential goods and services.  Water systems, firefighting, ambulance and emergency responders are just a few of the more vital services we look to our city and county governments to provide us with for the tax dollars we pay.  Unfortunately, as the recession of 2008 hit, many governments were faced with an inability to fund the dollars needed for these services and that’s when private companies saw an opportunity to make money.  Never mind that many of these companies had no experience in running public services such as these.  Sadly, the decision makers within the local government that were awarding private companies with these contracts (usually to the low bidder) overlooked the fact that making a profit and doing everything possible to save lives and property, regardless of cost, are completely incompatible with one another.

As a York County Supervisor, I was appalled by this seemingly outrageous breach of the public’s trust by officials that had obviously place money and likely, votes ahead of their citizens' well-being.  How does something so ill advised happen?  Unfortunately, most of the money to fund such business comes from you and me; in other words, our pensions are providing the fuel to these private equity firms that have neither the oversight or the good sense to know that this makes for bad business.  As the 2008 recession hit and interest rates and the stock market plummeted, private equity firms began to look around for creative ways in which to invest the trillions of dollars they controlled and this is the result of their so-called brilliance.

However, when TransCare EMS went bankrupt earlier this year, the major of Mount Vernon, New York made the following statement: “[TransCare EMS], private equity has, in this case, threatened public safety,” said Richard Thomas “It’s not the way to treat the public.”  Doesn't it beg the question of where was Mayor Thomas accountability in all of this?  This bankruptcy did not happen in a vacuum so even were we to overlook the lack of  wisdom that he and his governing board's displayed in their decision to hire this company, where was their oversight as those services slowly began to erode?

To be fair, not all such enterprises have been a disaster.  Some businesses operate in rural areas where it would otherwise be impossible for the locality to fund services from the taxes it collects.  In these rural areas of Virginia however, they are blessed with volunteer fire and rescue services. One would hope that these private companies would not try to interfere with these good Samaritans if they tried to set up shop in their town.  Nor should this blog discourage readers from using private ambulances where they do provide needed services. Seniors and the disabled have found the transportation these companies provide to be invaluable as traditional EMS will not furnish such service.

I am constantly harping on my constituents to stay involved in the local government.  I now add to this request the need for anyone planning on moving from our area to investigate the services in their new community.  The life you save may be your own. Call us for a complimentary consultation or register online for our complimentary seminars on topics of interest to you and your loved ones.

Reference: New York Times, (June 25, 2016) “When You Dial 911 and Wall Street Answer”

 

A Financial Plan for a Child with Special Needs

Families raising children with special needs don't always know how to begin their financial planning.

Experts estimate that raising a child to age 18 costs roughly $250,000 and those parents of children with disabilities and special needs will have costs that could be as much as 10 times more. With these types of financial challenges, here are some key areas to focus on to protect and grow your money.

• Assemble a team of experts. That team should include an elder law attorney, doctor, accountant, and government benefits specialist to help you understand Social Security, Medicaid, and other state and federal government programs;

• Draft a letter of intent. This is the child's history, medical needs, doctors, allergies, and likes and dislikes, which can be helpful to guide and direct your child's future trustee and guardian;

• Draft a will. This gives direction to your child's guardian and to the courts as to how assets should be moved and allocated;

• Create a Special Needs Trust (SNT). This will serve as a separate entity for your child to keep money so that he or she isn't disqualified from assistance programs; and

• Create a plan for building assets.

Let's focus on the special needs trust. Setting up a special needs trust is a fairly straightforward process, but the laws surrounding special needs trusts are very complicated. Don't try this on your own. Hire an experienced elder law and Special Needs Trust attorney.

With a special needs trust in place, you make certain that there's a financial mechanism to continue to provide the child with the highest quality of life possible. Completing a SNT can take a big weight off of parents' shoulders. Many parents wait until it's too late, or they leave money directly to the child. This makes everything much more complicated.

Selecting the future trustee is a matter of determining who will be the right person for the job. It may not be the caregiver. Some special needs trusts use professional trustees or pooled trusts, which are administered and managed by non-profit organizations.

Special needs require special planning. You should work with your team and your family to establish a climate to help you raise and provide for your child. Once created, this will offer you peace of mind in protecting and caring for your family and child.

Reference: The New York Daily News (April 1, 2016) "How to prepare a financial plan for families with special needs children"

 

Oh, the Tangled Webs We Weave

"The Road to Hell is Paved With Good Intentions"

Mary Jane Foseid received a large settlement following an accident that killed her husband Walter. What Mary Jane chose to do with this money should have been no one’s business but her own; however, the question of why she did as she did when all the way to the Wisconsin Court of Appeals.  Why? Because she gifted $51,000 to two of her four children, $102,000 to one of her children and 73 cents to her four child. As you read this, you have likely jumped to your own conclusions. Perhaps Mary Jane had a favorite child and a child she just didn’t get along with. What if I were to tell you that one of Mary Jane’s children was a special needs person –would that effect your conclusion about her motive for gifting as she did?

What plan should you make when one of your children, disabled from birth, depends upon the Medicaid system to provide her with life sustaining medical care?  Do you give her share to one of her siblings and ask that they spend it to her benefit? Although this is a fairly common question I am asked by parents in my practice, it is one of the few times that I give a universal answer:  No. It’s doomed to fail in ways that you might not imagine.  Certainly, Mary Jane could not imagine that one of her children, more than seventeen years after she gave her gifts would contest the way in which her sister spent her ‘double share’ by suing two of her siblings. She hoped her lawsuit would force them to divulge their mother’s plan. She was absolutely certain that her mother intended her sister to provide one half of her share to her little sister with disabilities and she wanted an accounting to prove that the money was spend appropriately. Whether the lawsuit was motivated by a desire to make sure her sister got her fair share of the gift or she was incensed at not being included in the so-called family planning, the reason for her action is less important than its result which was many thousands of dollars wasted on an expensive lawsuit that need never have happened.

There is absolutely no reason to exclude a child with special needs when it comes time to make gifts.  The solution to maintaining their eligibility for government programs such as Medicaid is to create and fund a special needs trust. The money held by the trustees won't affect the beneficiary's ability to qualify for those government benefits and will be clearly set aside for her benefit with legal as well as moral obligations to use the funds in the trust for the disabled child’s sole benefit. 

If you are thinking of making gifts to children or other relatives or friends, and one member of the group has special needs, talk with us or your estate planning law firm about how best to structure your gift.  Call us to request your complimentary consultation today.

References: Special Needs Answers (9/30/2015) https://specialneedsanswers.com

 

When Wandering Becomes Deadly

“Children and adults with autism and other disabilities frequently wander from safe settings, often with tragic consequences. It’s time for federal action,” said Wendy Fournier, president of the National Autism Association.

The tendency to wander away from safety is a huge problem for children with autism and adults with cognitive disabilities. A staggering 50% of all children with autism will wander from home or school and more than 60% of adults with Alzheimer’s or another form of dementia will do the same. 40% of such cases involving a loved one who has wandered off will result in death.   

Many states including Virginia have enacted legislation which allows state and local agencies to proactively take measures to prevent anyone with cognitive impairments from wandering into harm’s way.  Virginia’s law allows law enforcement agencies to get involve quickly.   There are also things the individual's loved ones can put in place that will prevent a wandering tragedy.

• Choose the Right Alarm: Today’s marketplace offers a wide variety of affordable alarm systems for doors and windows that will help prevent your loved one from slipping away unnoticed.
• Tracking Device: Check with local law enforcement for Project Lifesaver, MedicAlert, or LoJak SafetyNet services. These tracking devices are worn on the wrist or ankle and locate the individual through radio frequency. Various GPS tracking systems are also available.
• ID Bracelet: Medical ID bracelets include your loved one's name, telephone number and other important information. They state that your loved one has autism or dementia. If wearing a bracelet or necklace is intolerable, temporary tattoos with contact information are available.
• Neighbors: Sit down with your neighbors for a brief visit to introduce your loved one and don't forget to provide a photograph. Neighbors can be an invaluable resource in helping to reduce the risks associated with wandering.

Whether you’re a caregiver for a loved one with autism or dementia, I urge you to plan for your future and for the future care needs of your loved one. You can learn more about this topic as well as other strategies on our website under the tab entitled: elder law planning. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707.

References:Spectrumsmagazine.com (March 17, 2015) “The Dangers of Wandering” and Brightfocus.org (June 22, 2015) Staying Safe: Wandering and the Alzheimer’s Patient”

Eight Important Considerations When Estate Planning for Special Needs (Part II)

There are unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are also numerous misconceptions in this area that can result in costly mistakes when planning for special needs beneficiaries.

This is the 2nd installment of two blogs; today and yesterday, on this important topic.  I hope you find it helpful.

Consideration #5: Use great caution in choosing a trustee.  Loved ones or family members can manage the special needs trust while alive and well if they are willing to serve and have proper training and guidance. Once the family member or loved one is no longer able to serve as trustee, they can choose who will serve according to the instructions provided in the trust. Families or loved ones who create a special needs trust may choose a team of advisors and/or a professional trustee to serve. Whomever they choose, it is crucial that the trustee is financially savvy, well-organized and of course, ethical.  The trustee of a special needs trust should understand the trustmaker’s objectives and be qualified to invest the assets in a manner most likely to meet those objectives. 

Consideration #6: Invite others to contribute to the special needs trust.  A key benefit of creating a special needs trust now is that the beneficiary's extended family and friends can make gifts to the trust or remember the trust as they plan their own estates. For example, these family members and friends can name the special needs trust as the beneficiary of their own assets in their revocable trust or will, and they can also name the special needs trust as a beneficiary of life insurance or retirement benefits.  Unfortunately, many extended family members may not be aware that a trust exists, or that they could contribute money to the special needs trust now or as an inheritance later.  Creating a special needs trust now allows others, such as grandparents and other family members, to name the trust as the beneficiary of their own estate planning. 

Consideration #7: Relying on siblings to use their money for the benefit of a special needs child can have serious adverse effects.  Many family members rely on their other children to provide, from their own inheritances, for a child with special needs. This can be a temporary solution for a brief time, such as during a brief incapacity if their other children are financially secure and have money to spare. However, it is not a solution that will protect a child with special needs after the death of the parents or when siblings have their own expenses and financial priorities.

What if an inheriting sibling divorces or loses a lawsuit? His or her spouse (or a judgment creditor) may be entitled to half of it and will likely not care for the child with special needs. What if the sibling dies or becomes incapacitated while the child with special needs is still living? Will his or her heirs care for the child with special needs as thoughtfully and completely as the sibling did?

Siblings of a child with special needs often feel a great responsibility for that child and have felt so all of their lives. When parents provide clear instructions and a helpful structure, they lessen the burden on all their children and support a loving and involved relationship among them.

Relying on siblings to care for a special needs beneficiary is a short-term solution at best. A special needs trust ensures that the assets are available for the special needs beneficiary (and not the former spouse or judgment creditor of a sibling) in a manner intended by the parents. 

Bonus Consideration:  Stay up to date on changes in the law.  The rules applicable to special needs trusts are constantly changing.  Most recently, the Social Security Administration changed the rules on special needs trusts that are created using assets of the special needs beneficiary (called a “self-settled special needs trust”).  The new Social Security regulations require certain provisions to be present in any self-settled trust drafted after January 1, 2000 that allows for early termination of the trust (termination prior to the death of the special needs beneficiary).  

If these required provisions are not in the trust, the special needs beneficiary could lose SSI or Medicaid eligibility.  The new regulations go into effect October 1, 2010.   Please contact us if you have questions about the new regulations or if you would like more information on the changes. 

Conclusion.  Planning for a special needs beneficiary requires particular care and knowledge on the part of the planning team.  A properly drafted and funded special needs trust can ensure that special needs beneficiary has sufficient assets to care for him or her, in a manner intended by loved ones, throughout the beneficiary's lifetime.

You can learn more about this topic as well as other strategies on our website under the tab entitled: special needs planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707.

Eight Important Considerations When Estate Planning for Special Needs (Part I)

There are unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are also numerous misconceptions in this area that can result in costly mistakes when planning for special needs beneficiaries.

This is the 1st installment of two blogs; today and tomorrow, on this important topic.  I hope you find it helpful.

Consideration #1: Avoid disinheriting the special needs beneficiary.  Many disabled persons receive Supplemental Security Income (“SSI”), Medicaid or other government benefits to provide food, shelter and/or medical care. The loved ones of the special needs beneficiaries may have been advised to disinherit them - beneficiaries who need their help most - to protect those beneficiaries' public benefits. But these benefits rarely provide more than basic needs. And this solution (which normally involves leaving the inheritance to another sibling) does not allow loved ones to help their special needs beneficiaries after they themselves become incapacitated or die.  The best solution is for loved ones to create a special needs trust to hold the inheritance of a special needs beneficiary.  It is unnecessary and in fact poor planning to disinherit special needs beneficiaries. Loved ones with special needs beneficiaries should consider a special needs trust to protect public benefits and care for those beneficiaries during their own incapacity or after their death. 

Consideration #2: Procrastinating can be costly for a special needs beneficiary.  None of us know when we may die or become incapacitated.  It is important for loved ones with a special needs beneficiary to plan early, just as they should for other dependents such as minor children. However, unlike most other beneficiaries, special needs beneficiaries may never be able to compensate for a failure to plan. Minor beneficiaries without special needs can obtain more resources as they reach adulthood and can work to meet essential needs, but special needs beneficiaries may never have that ability.  Parents, grandparents, or any other loved ones of a special needs beneficiary face unique planning challenges when it comes to that child. This is one area where families simply cannot afford to wait to plan. 

Consideration #3: Don’t ignore the special needs of the beneficiary when planning.  Planning that is not designed with the beneficiary's special needs in mind will probably render the beneficiary ineligible for essential government benefits. A properly designed special needs trust promotes the comfort and happiness of the special needs beneficiary without sacrificing eligibility.

Special needs can include medical and dental expenses, annual independent check-ups, necessary or desirable equipment (for example, a specially equipped van), training and education, insurance, transportation and essential dietary needs. If the trust is sufficiently funded, the disabled person can also receive spending money, electronic equipment & appliances, computers, vacations, movies, payments for a companion, and other self-esteem and quality-of-life enhancing expenses: the sorts of things families now provide to their child or other special needs beneficiary. When planning for a beneficiary with special needs, it is critical that families utilize a properly drafted special needs trust as the vehicle to pass assets to that beneficiary. Otherwise, those assets may disqualify the beneficiary from public benefits and may be available to repay the state for the assistance provided. 

Consideration #4: A special needs trust does not have to be inflexible.  Some special needs trusts are unnecessarily inflexible and generic. Although an attorney with some knowledge of the area can protect almost any trust from invalidating the beneficiary's public benefits, many trusts are not customized to the particular beneficiary's needs. Thus the beneficiary fails to receive the benefits that the parents or others provided when they were alive.

Another frequent mistake occurs when the special needs trust includes a pay-back provision rather than allowing the remainder of the trust to go to others upon the death of the special needs beneficiary. While these pay-back provisions are necessary in certain types of special needs trusts, an attorney who knows the difference can save family members and loved ones hundreds of thousands of dollars, or more   A special needs trust should be customized to meet the unique circumstances of the special needs beneficiary and should be drafted by a lawyer familiar with this area of the law.

You can learn more about this topic as well as other strategies on our website under the tab entitled: special needs planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707.

Tomorrow's blog offers the next important considerations for Special Needs Families.