Families who have a family member with a disability must plan for the future very carefully. How assets are left after your death can have a tremendous impact on the quality of life for that person. In the past, a Will may have been enough, but times have changed. To protect a person with special needs, a well-defined estate plan is vital.
A Special Needs (or “Supplemental Needs”) Trust allows a parent, grandparent, guardian, or other person to provide funds for a disabled child without disrupting the child’s eligibility for government aid. Important points to remember while investigating the use of this estate planning tool are:
- -Decide on an appropriate guardian for your child
- -Determine who would be a suitable Trustee(s) to manage the Trust’s assets and supervise your child’s finances
- -Outline instructions for your child’s education, housing, personal and emotional needs
Wilson Ratledge helps families address the financial, legal and social aspects of a person’s life to develop an effective plan for the future. Our goal is to ensure that their needs are met and that they have the opportunity to expand their horizons and follow their dreams. Some important aspects of Special Needs Trusts are listed below.
WHAT IS A SPECIAL NEEDS TRUST?
A Special Needs Trust is a discretionary, spendthrift trust created for a person who is elderly or disabled as a way to supplement the person’s public benefits. Those public benefits may include SSI, Medicaid, Section 8 Housing and other federally or state-sponsored assistance programs.
WHAT ARE THE ADVANTAGES OF A SPECIAL NEEDS TRUST?
A Special Needs Trust may:
- Help maintain an individual’s potential eligibility for a group home.
- Purchase a home for the individual.
- Pay for services that Medicaid does not cover, including home care and such items as wheelchairs, handicap accessible vans and mechanical beds.
- Pay for a personal attendant, should that be required.
- Pay for recreational and cultural experiences.
- Help enrich the beneficiary’s life
WHAT REQUIREMENTS MUST BE MET WHEN ESTABLISHING A SPECIAL NEEDS TRUST?
There are two key requirements:
- The trustee must be given absolute control over the distribution of the funds.
- The person with special needs cannot have the authority to revoke the trust.
SELECTION OF TRUSTEE
Selecting a trustee for a Special Needs Trust is one of the most important steps in the planning process, because the trustee will be empowered to manage the life of the child with special needs.
A special needs trustee should have these characteristics:
- A long-term commitment.
- A special sensitivity to the individual’s disabilities.
- Active involvement in monitoring the client’s services.
- The ability to be an advocate for medical and financial entitlements.
- The ability to be a prudent investor and distributor of trust funds.
While family members often want to serve as trustee, they typically don’t possess all of the necessary qualifications. For that reason, it is strongly recommended that families retain a professional trustee to oversee the Special Needs Trust, with a family member named as co-trustee.
If a family selects a professional trustee from a bank, they should be sure that the bank has a trust department with an excellent track record for managing money. If a family chooses an attorney to serve as the professional trustee, they should be certain that he or she has a good track record in managing trust money, or that he or she will arrange to hire a professional money manager to oversee trust investments.
WHAT IS THE ROLE OF A CARE MANAGER?
A Special Needs Trust can direct the trustee to hire a care manager. That individual specializes in making the necessary arrangements to provide the special needs individual with the level of care he or she requires. The care manager should have a social work background and related expertise and be knowledgeable about all social service programs available to assist the beneficiary.
A good care manager will:
- Monitor the individual’s progress.
- Ensure that the individual’s needs are met.
- Coordinate nutrition and cleanliness programs.
- Make sure that exercise and physical therapy programs are maintained.
- Coordinate any socialization or psychological counseling.
- Ensure that the special needs person has assistive devices, if needed.
- Have a plan and a responsible advocate available to resolve problems in a quick and timely manner in the event of an emergency.
Contact Wilson Ratledge today to speak to speak to an attorney about any questions you may have regarding Special Needs Planning.