Many families help their disabled loved ones with whatever resources they have, if they can, but this must be done carefully to protect eligibility for government aid, reports a recent article titled “Here’s how ABLE accounts, special needs trust differ…and how they can work together” from CNBC. An ABLE account—named for the Achieving a Better Life Experience Act—can be paired with Special Needs Trusts to improve the quality of life for the disabled family member.

How do Special Needs Trusts work?

The two types of Special Needs Trusts are known as First-Party Special Needs Trusts and Third Party Special Needs Trusts.

A First Party Trust is created with the disabled individual’s own funds and is used to shelter any income, earned or inherited, to maintain their eligibility for Medicaid, which has both income and asset limits. Any distributions from the First Party Trust must be approved by the trustee. After the death of the disabled individual, Medicaid will make a claim against any funds in the First Party Trust to the extent of funds expended by Medicaid on behalf of the disabled individual.

In contrast, the Third-Party Trust is funded by parents or others and are only for the disabled person’s needs (not the disabled person’s own funds). After the disabled person passes, the funds are allowed to go to someone else in the family (not Medicaid).  Obviously, a Third Party Trust is preferred to a First Party Trust.  That is why parents who have disabled persons on Medicaid should think twice about bequests directly to the disabled person.  Doning that will either (1) kick the disabled person off of Medicaid; or (2) Medicaid will allow the disabled person to stay on Medicaid at the cost of putting the disabled person’s property in a First Party Trust (over which Medicaid is the remainder beneficiary).

Special Needs Trusts (SNTs) may not be used for certain expenses paid for by government programs, including groceries, medical expenses covered by Medicaid and housing expenses, which are covered by Supplemental Security Income (SSI).

Expenses not covered by government programs can also be paid from ABLE Accounts. The ABLE account is a tax-advantaged saving account similar to the 529 accounts used for college savings. Funds may be used for expenses that maintain or improve the individual’s health, independence, or quality of life. Funds can be used for education, recreation, personal technology and more.  They are treated much like First Party Trusts in that Medicaid can clawback funds from the ABLE account after the death of the recipient.

There are requirements and limitations to the ABLE account. In 2022, only $16,000 may be contributed per year. Most parents leave more than this amount for their disabled children, so a different vehicle is needed for inheritance.

Here’s where it gets interesting: A trustee for a SNT can make a distribution to the ABLE account to help cover expenses not permitted to be paid from the Trust.

An estate planning attorney can help the family plan for the present and the future to use these and other strategic planning tools for a disabled individual.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “Is ABLE Account the Same as Special Needs Trust?” read also these additional articles: Pay Attention to Income Tax when Creating Estate Plans and How Changes to Portability of the Estate Tax Exemption May Impact You and What Healthy Snack Is Best for My Long-Term Health? and Who will Receive Naomi Judd’s Estate?

Reference: CNBC (June 30, 2022) “Here’s how ABLE accounts, special needs trust differ…and how they can work together”

A special needs trust (an “SNT”) is a legal arrangement and fiduciary relationship that lets a physically or mentally disabled or chronically ill person get income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income (SSI), or Medicaid.

Investopedia’s recent article entitled “What Is a Special Needs Trust?” says that a grantor creates a trust, and a trustee oversees the disbursement of assets from the trust. The beneficiary is a person for whose benefit the trust is created. The trust will supplement the beneficiary’s government benefits but won’t replace them.

An SNT helps cover a disabled individual’s financial needs that aren’t covered by public assistance payments. The assets held in the SNT don’t count toward public assistance eligibility.

The proceeds from this type of trust are typically used for medical expenses, caretaker expenses and transportation costs. The person who creates the SNT (the settlor) names a trustee who will have control over the trust. The trustee will also oversee its management and the disbursement of funds.

The SNT is funded with assets belonging to a person other than the beneficiary, and funds belonging to the beneficiary can’t be used to fund the SNT. Funding may come from gifts, an inheritance and proceeds of life insurance policies.

Assets originally belonging to the disabled individual placed into the trust may be subject to Medicaid’s repayment rules, but assets provided by third parties such as parents aren’t.

SNTs are irrevocable and can’t be tapped by creditors via a lawsuit.

A SNT can have benefits for both parties. The beneficiary gets financial support without putting their eligibility for income-restricted programs or services in jeopardy.

The person or party that contributes to the SNT is assured that the proceeds will go to expenses they stipulate.

The grantor or their legal representative must define the terms of the trust documents very carefully to ensure their validity and to confirm that the directives and purpose of the document are explicitly clear.

If you want to explore creating a special needs or supplemental benefits trust, speak with an experienced elder law attorney.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “What is a Special Needs Trust?” read also these additional articles: How to Plan in a Time of Uncertainty and Can You Leave an IRA to a Beneficiary? and What Is the Purpose of a Exemption Trust? and Did Former NFL Tackle and Fox Sports Commentator Tony Siragusa have an Estate Plan?

Reference: Investopedia (July 12, 2022) “What Is a Special Needs Trust?”

Supplemental Needs Trusts allow disabled individuals to retain inheritances or gifts without eliminating or reducing government benefits, like Medicaid or Supplemental Security Income (SSI). There are cases where the individual is vulnerable to exploitation or unable to manage their own finances and using an SNT allows them to receive additional funds to pay for things not covered by their benefits.

Having an experienced estate planning attorney properly create the SNT is critical to preserving the individual’s benefits, according to a recent article titled “Protecting Government Benefits using Supplemental Needs Trusts” from Mondaq.

Disabled individuals who receive SSI must be careful, since the rules about assets from SSI are far more restrictive then if the person only received Medicaid or Social Security Disability and Medicaid.

The trustee of an SNT makes distributions to third parties like personal care items, transportation (including buying a car), entertainment, technology purchases, payment of rent and medical or therapeutic equipment. Payment of rent or even ownership of a home may be paid for by the trustee.

The SNT may not make cash distributions to the beneficiary. Payment for any items or services must be made directly to the service provider, retailers, or other entity, for benefit of the individual. Not following this rule could lead to the SNT becoming invalid.

SNTs may be funded using the disabled person’s own funds or by a third party for their benefit. If the SNT is funded using the person’s own funds, it is called a “Self-Settled SNT.” This is a useful tool if the disabled person inherits money, receives a court settlement or owned assets before becoming disabled.

If someone other than the disabled person funds the SNT, it’s known as a “Third-Party SNT.” These are most commonly created as part of an estate plan to protect a family member and ensure they have supplementary funds as needed and to preserve assets for other family members when the disabled individual dies.

The most important distinction between a Self-Settled SNT and a Third-Party SNT is a Self-Settled SNT must contain a provision to direct the trust to pay back the state’s Medicaid agency for any assistance provided. This is known as a “Payback Provision.”

The Third-Party SNT is not required to contain this provision and any assets remaining in the trust at the time of the disabled person’s death may be passed on to residual beneficiaries.

Even if the disabled person receives an inheritance directly, there is a risk that government benefits may be lost.  But disabled persons are allowed to have their assets contributed to a “First-Party SNT”.  With this type of SNT, the disabled person is allowed to be the beneficiary for life, but the government must be the remainder beneficiary after the death of the disabled person, up to the amount of the benefits the government expended for the disabled person.  This is an imperfect solution, but it is often the only one available to disabled persons whose parents did not plan ahead with a good Third-Party SNT.  Talk to an estate planning attorney to avoid this situation.

Many estate planning attorneys use a “standby” SNT as part of their planning, so their loved ones may be protected, in case an unexpected event occurs and a family member becomes disabled.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “Does a Supplemental Needs Trust have an Impact on Government Benefits?” read also these additional articles: What Games Keep My Mind Sharp as I Age? and What Is the Proposed IRS Anti-Clawback Provision? and Why Is Beneficiary Designation Important? and Does Diabetes Increase Chances of Suffering from Dementia?

References: Mondaq (May 27, 2022) “Protecting Government Benefits using Supplemental Needs Trusts”

When a family includes a disabled individual, sometimes referred to as a “person with special needs,” estate planning needs to address the complexities, as described in a recent article titled “Customize estate plan to account for disabled beneficiaries” from The News-Enterprise. Failing to do so can have life-long repercussions for the individual.

This often occurs because the testator, the person creating the estate plan, does not know the implications of failing to take the disabled person’s situation into consideration, or when there is no will.

The most common error is leaving the disabled beneficiary receiving an outright inheritance. With a simple will, or no will, the beneficiary receives the inheritance and becomes ineligible for public benefits they may be receiving. The disruption can impact their medical care, housing, work and social programs. It may also lead to the loss of their inheritance.

If the disabled beneficiary does not currently receive benefits, it does not mean they will never need them. After the death of a parent, for instance, they may become completely reliant on public benefits. An inheritance will put them in jeopardy.

A second common error in special needs planning is naming the caregiver as the beneficiary, rather than the disabled individual. This causes numerous problems. The caregiver has the right to do whatever they want with the assets. If they no longer wish to care for the beneficiary, they are under no legal obligation to do so.

If the caregiver has any liabilities of their own, or when the caregiver becomes incapacitated or dies, the assets intended for the disabled individual will be subject to any estate taxes or creditors of the caregiver. If the caregiver has any children of their own, they will inherit the assets and not the disabled person.

The caregiver does not enjoy any kind of estate tax protection, so the estate may end up paying taxes on assets intended for the beneficiary.

The third major planning mistake is using an outright bequest in a will instead of a trust – either a testamentary trust in a will or a stand along intervivos (living) trust – as the primary planning method. A Special Needs Trust is designed to benefit a disabled individual to protect the assets and protect the individual’s public benefits. The trust assets can be used for continuity of care, while maintaining privacy for the individual and the family.

Planning for individuals with special needs requires great care, specifically for the testator and their beneficiaries. Families who appear to be similar on the outside may have very different needs, making a personalized estate plan vital to ensure that beneficiaries have the protection they deserve and need.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “Special Needs Planning” read also these additional articles: What Needs to Be Reviewed in Estate Plan? and Researchers Look to Reduce the Risk Of Women Developing Dementia and How Do I Use Deceased Spouse’s Life Insurance? and Is there a Connection between Vitamin Deficiency and Dementia?

Reference: The News-Enterprise (March 15, 2022) “Customize estate plan to account for disabled beneficiaries”

A person with a physical or cognitive disability may qualify for taxpayer-sponsored public benefits or privately funded benefits to support his or her living expenses because he or she may be unable to work or to gain full employment due to a disability. Public benefits, like Supplemental Security Income (SSI) are “means tested.” As a result, to apply (or re-apply) for them, a person must use or “spend down” most of their savings or funds that are available without restriction.

Kiplinger’s recent article entitled “How to Keep Your Estate Plan from Jeopardizing a Disabled Heir’s Benefits” suggests that you partner with an experienced estate planning or elder law attorney who works in the complicated arena of public benefits planning.

A Special Needs Trust can be either a first-party trust created by a parent, grandparent, guardian or a court using the beneficiary’s own funds; or a third-party trust funded with assets belonging to the trust’s creator. Since the beneficiary’s assets are used, a first-party Special Needs Trust requires that the state benefits provider be reimbursed for lifetime benefits paid by it on behalf of the beneficiary.

A third-party Special Needs Trust for the primary benefit of the disabled individual will supplement, but not supplant, his or her public benefits. Upon their death, the remaining balance of the trust will be distributed to their heirs.

Special Needs Trusts are one of several solutions that can be used to plan for descendants who currently receive disability benefits or may in the future. There are also some other options.

ABLE accounts. This is a savings accounts for individuals with disabilities. It is like 529 education savings accounts with similar tax advantages; However, there is a limited amount that can be held in an ABLE account. The balance will not be considered an available resource.

Pooled trusts. This type of trust is managed by a nonprofit organization, where the funds of many beneficiaries are combined into one master trust for administrative and investment purposes. Sub-accounts are then created for each beneficiary, with the disabled person’s account getting a proportionate share of the entire fund’s earnings. Distributions may be made by the trustee from the beneficiary’s share and used for his needs.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “How Do I Set Up an Estate Plan to Help Grandchild with Special Needs?” read these additional articles: Can You Set Up a Trust After Death? and Do I Need an Attorney for Probate? and What Happens to Parents’ Debts When They Die? and Write a Letter of Instruction for Loved Ones

Reference: Kiplinger (Feb. 9, 2022) “How to Keep Your Estate Plan from Jeopardizing a Disabled Heir’s Benefits”

The three main structures a family should put in place to provide future protection for their child relate to money management, self-care and housing, says CNBC’s recent article entitled “If you have a child with special needs, here’s how to plan for their life after you pass.”

Money Management: If the child gets government benefits, such as Supplemental Security Income or Medicaid, parents will usually establish a special needs trust to shield assets to allow the child continued access to those benefits. A trustee oversees the funds and other trust provisions not under the child’s control. If a special needs trust is established, the trust won’t result in the child losing benefits.

Life Insurance. This is the cheapest way to fund a trust. That’s because you need to know what’s left over from your estate to care for the child, and this creates that certain bucket of money.

Self-Care: Parents must arrange the services their child will need to live independently or semi-independently, which may be overseen by a court-appointed curator (called a conservator or guardian in states other than Louisiana). This person makes all decisions regarding an individual’s financial and/or personal affairs. In the alterative, decisions may be made by a person with power of attorney, as well as the individual.

Parents may want to write a “letter of intent,” which is a guide for those who will care for the child in the future. This letter can cover family history, medical care, benefits, daily routines, diet, behavior management, residential arrangements, education, social life, career, religion and end-of-life decisions, according to the Autism Society.

Housing: With respect to future housing for the child, location is more important than the house itself. Parents should consider options beyond keeping their loved one in the family home. It’s more important to look at the individual and the interests and supports they might require. Parents may think of retiring to a community that supports the interests of the child. There is a trend toward more community-based living. State-administered Medicaid HCBS waiver programs allow people with disabilities to live in a house or apartment. The state, in turn, provides staffing for a group of similar residents. Sometimes, a group of families will purchase a collection of houses or condominiums. And people are rehabbing houses for roommate living, resulting in neighborhoods of people with special needs.

It’s critical to work with specialists in this type of planning, such as an experienced estate planning or elder law attorney.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “How Do I Plan with a Special Needs Child?” read these additional articles: How Can I Clean Up My Estate Plan? and What OTC Drug Makes High Blood Pressure Worse? and Any Ideas How to Pay for Long-Term Care? and How Do I Give My Children the Summer Home?

Reference: CNBC (Dec. 6, 2021) “If you have a child with special needs, here’s how to plan for their life after you pass”

Neglecting to update an estate plan is always problematic. However, failing to update an estate plan when the family includes a special needs child can lead to disaster. An article from Barron’s titled “Retirement Planning? Don’t Forget to Review Plans for Special Needs Children” explains how this can be prevented before problems arise.

Decisions made in the past may no longer be appropriate, or even permitted. A grandparent may have been named as a guardian ten years ago and may have moved to another part of the country or died. A retirement plan based on selling the family home and downsizing to a small apartment may no longer be feasible. Healthcare insurance choices may be limited after retirement. In other words, life changes and estate plans need to change also.

Children with special needs who receive Supplemental Security Income (SSI) and Medicaid may not have more than $2,000 of assets in their name. If they are listed as beneficiaries on retirement plans or life insurance proceeds, they will become ineligible for these benefits. Money should never be left directly to a child with special needs, but it can be left through a Special Needs Trust. Parents may not realize how critical this is, or they may overlook changing beneficiary designations. Either way, the results can be financially devastating.

Talk with grandparents and any relatives who might want to leave something, including retirement plan funds, to a special needs child. Chances are they have no idea how an inheritance can impact a special needs family member.

Laws concerning funding a Special Needs Trust have changed. The ten-year rule on required distributions no longer applies to beneficiaries of qualifying Special Needs Trusts, so the SNT may be a beneficiary of a qualified retirement plan. A Roth IRA may be the best way to leave assets to an SNT, as there are no taxes due on withdrawals.

Life insurance is often used to care for a special needs family member. A second-to-die life insurance policy, in lieu of being used for retirement, can be used to insure both parents and pay to the SNT on the death of the second parent, when the money is needed most. If one parent doesn’t qualify because of health issues, their underwriting may be balanced by the good health of another parent, which may keep premiums reasonable. Make sure the laws of your state and financial institution permit the proceeds to be directed to an SNT.

An ABLE account is a tax-advantaged savings plan for individuals with disabilities. The account can be opened for an individual at any age, as long as the disability onset occurred before age 26. Talk with an estate planning attorney to ensure the individual will qualify for this type of account. The 2021 annual contribution limit is $15,000. However, there are many exceptions, so don’t do this without professional help. For instance, SSI may be suspended, if the account balance rises about $100,000. Be sure the amount in the ABLE account won’t put means-tested programs at risk.

If you liked this article, “How Do I Align Retirement Planning with Planning for a Special Needs Child?” read these articles:  Estate Planning for Special Needs Children and Who Pays the Tax on a Special Needs Trust? and How Do Special Needs Trusts Work? and Special Needs

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about esate planning and asset protection.

Reference: Barron’s (Oct. 23, 2021) “Retirement Planning? Don’t Forget to Review Plans for Special Needs Children”

The Balance’s recent article entitled “What is Forced Heirship?” explains that this is a succession and estate planning concept peculiar to Louisiana.

Unfortunately, too many financial professionals, and even attorneys (believe it or not, even some attorneys that draft wills for their clients), give short shrift to this still very important Louisiana legal concept.  Let me say this clearly: Forced heirship in Louisiana has not been repealed.  It represents a pitfall for many Louisiana residents, their attorneys, and their financial advisors.

Through legislation, forced heirship was scaled back in the 1990s to cover by default any child that was under the age of 24.  However, still included in the definition of “forced heirs” are children of any age that have a physical or mental condition or disability such that the disability could potentially render the child from caring for himself or his estate.  That is broad and relatively nonspecific terminology, and it is the language of a lawyer’s dreams.

What does this mean for forced heirship in Louisiana?  Louisiana Courts of Appeal have ruled that a daughter with bipolar disorder (sometimes referred to as a person who suffers from manic-depression), even though she was an adult child over the age of 24, and even though she functioned fine with appropriate medication, was a forced heir because her bipolar could potentially render her incapable of caring for herself (her person) or her estate (her “stuff” or possessions).  Keep in mind that she was fine with medication, and the Court of Appeal ruled that she was nevertheless a forced heir.

You can imagine how a court might rule in the context of a person with heart disease, COPD, rheumatoid arthritis, or any other type of serious physical or mental ailment. Each case is fact specific to the person who argues he or she is a forced heir.

When it comes to Louisiana forced heirship, the reader should keep in mind that as people live longer, it is not uncommon for me to consult with clients who want to disinherit children who themselves are in old age with significant physical health conditions (not to mention mental health conditions).  It is not uncommon for a client in his 70s or 80s to have a child from a prior marriage who is in their 50s or 60s (that they wish to disinherit) who suffers from some significant physical or mental ailment.

Also keep in mind that the physical or mental ailment must be in place at the time of the parent’s death to prove one’s status as a forced heir, and the presumptive forced heir should have enough of a documented medical history to substantiate that the condition was present at that time.

If a person can substantiate his or her status as a “forced heir”, the Louisiana forced heir can make a claim in the succession of the parent, even is the forced heir was disinherited.

Defenses to forced heirship for the succession of the parent can include certain very limited fact patterns.  See Louisiana Civil Code art. 1621.  These include, among others:

1. The child has used physical violence of some sort against the parent (including but not limited to attempted murder);
2. The child is guilty of cruel treatment against the parent;
3. The child has used threats against the parent to hinder the parent from executing a last will and testament; or
4. The child, after reaching adulthood, has failed to communicate with the parent for a period of two (2) years;

However, in most cases, these defenses are not present.

Are there any other defenses to Louisiana forced heirship that a good estate planning attorney can draft into your estate planning documents to discourage a Louisiana forced heirship claim by a litigious heir?  Yes.  But your attorney must know about them.  Many don’t.

The estate planning attorney should be well versed in the secrets of Louisiana estate planning law, because there are some primary tools that the good estate planning attorney can use for you to discourage (or limit) a forced heirship claim.

A properly drafted last will and testament or living trust can have these defensive provisions drafted into them, and even if the child could potentially substantiate their claim as a forced heir, it would put the succession in the position of being able to negotiate a settlement with the forced heir.  That is because the forced heir, like most plaintiffs, wants cash now.  The prospect of the forced heir receiving something, much later, even after their death, is not an attractive prospect.

But these provisions must be put into your estate planning documents by a qualified estate planning attorney.  If Louisiana forced heirship is a concern, don’t default to making your own estate plan.  Seek out a qualified Louisiana estate planning attorney, preferably one that is Board Certified in Estate Planning and Administration.

Keep another thing in mind.  If your child is under the age of 18 (a forced heir by default), and you have an ex-spouse that would get sole custody of your child, that ex-spouse will be entitled to manage your assets that are inherited by your child.  That ex-spouse would be entitled, under default laws of Louisiana, to effectively use up the assets of your child who is a forced heir.  Don’t let this happen.  You can protect your assets in these situations as well, but you need an estate plan crafted in a particular way.

Special Needs Planning is something else to consider.  Many clients do not want to disinherit a forced heir, who is often a disabled child.  A disabled child is effectively a forced heir by default.  The portion going to the forced heir could result in the child being denied Medicaid or other government benefits.  This is because Medicaid will generally require that a recipient have $2,000 or less in assets to receive benefits.  Clients who do not want to disinherit a disabled child, but don’t want their children denied these benefits, which have often been received by the child for much of the child’s life, should have a specific estate plan that includes a Special Needs Trust (also called a Supplemental Needs Trust, or an SNT).  Talk to a qualified estate planning attorney today to discuss setting up an inter vivos or testamentary Special Needs Trust for your disabled or special needs heirs.

To learn more about estate planning topics particular to Louisiana, read these articles: Affidavit of Small Succession in Louisiana and Is My Will Void If I Get Divorced? and How Do I Write a Will?  This additional article might interest you: What Is the Required Minimum Distribution for 2021?

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning and asset protection.  If you are a forced heir that has been disinherited, and your parent was penny wise and pound foolish when it came to their estate plan (your parent didn’t have an attorney that knew about the secrets referred to in this article), contact me to assert your rights as a forced heir.  If you are a parent that may have one or more forced heirs, contact me today to put my defensive provisions into your estate plan.

Reference: The Balance (Feb. 13,2021) “What is Forced Heirship?”

Forbes’ recent article entitled “Hiring an Elder Law Attorney” tells us that elder law attorneys are lawyers who assist the elderly, their family members and caregivers with legal questions and planning related to aging.

The types of issues with which an experienced elder law attorney can help are numerous. They may include some or all of the following:

• Medicare, Social Security, and disability claims and appeals
• Supplemental insurance and long-term health insurance claims and appeals
• Long-term care planning
• Medicaid planning, including the preservation and transfer of assets.
• Accessing health care in a nursing home or other managed care environment and long-term care placements
• Medicare enrollment
• Estate and disability planning, including wills, living wills, powers of attorney for financial and health needs and trusts
• Veterans’ benefits
• Probate and estate administration
• Conservatorships and guardianships, in the event that you become physically or mentally incapacitated
• Housing discrimination and home equity conversions (reverse mortgages)
• Health and mental health law questions; and
• Elder abuse and fraud recovery issues.

You can hire an estate planning or trust attorney to handle some of these legal matters. However, if those lawyers don’t offer elder law services, they will likely be more transactional rather than ongoing.

An estate planning attorney will prepare the necessary documents and once they’re executed, the engagement ends. Check to see if they practice the areas covered in elder law, if you are looking for an attorney that handles all of these areas.

To learn more, read these articles:  8 Key Steps to Take Before Hiring a Lawyer and Does Executor have to Be a Family Member? and Should I Keep My Life Insurance Policy?

Reference: Forbes (Oct. 4, 2021) “Hiring an Elder Law Attorney”

BOOK A CALL with elder lawyer Ted Vicknair today to find out more about how you can plan your future for your and your family’s security.

Part of providing comprehensive estate planning for families includes being prepared to address the needs of family members with special needs. Some of the tools used are trusts, guardianship and tax planning, according to the article “How to Help Clients With Special Needs Children” from Accounting Web. Your estate planning attorney will be able to create a plan for the future that addresses both legal and financial protections.

A survey from the U.S. Department of Health and Human Services revealed that 12.8 percent of children in our country have special health care needs, while 20 percent of all American households include a child with special needs. The CDC (Center for Disease Control) estimates that 26% of adults in America have some type of disability. In other words, some 61 million Americans have some kind of disability.

Estate planning for a child with special needs can be expensive, depending upon the severity of the disability. The first step for families is to have a special needs trust created through an estate planning attorney with experience in this area. The goal is to have money for the support and care of the child available, but for it not to be in the child’s name. While there are benefits available to the child through the federal government, almost all programs are means-tested, that is, the child or adult with special needs may not have assets of their own.

For many parents, a good option is a substantial life insurance policy, with the beneficiary of the policy being the special needs trust. Depending on the family’s situation, a “second to die” policy may make sense. Both parents are listed as the insured, but the policy does not pay until both parents have passed. Premiums may be lower because of this option.

It is imperative for parents of a child with special needs to have their estate plan created to direct their assets to go to the special needs trust and not to the child directly. This is done to protect the child’s eligibility to receive government benefits.

Parents of a child with special needs also need to consider who will care for their child after they have died. A guardian needs to be named as early as possible in the child’s life, in case something should occur to the parents. The guardianship may end at age 18 for most children, but for an individual with special needs, more protection is needed. The guardian and their role need to be spelled out in documents. It is a grave mistake for parents to assume a family member or sibling will care for their child with special needs. The need to prepare for guardianship cannot be overstated.

Estate planning for special needs children will usually require a “Special Needs Trust”, or a “Ssupplemental Needs Trust”.  The special needs trust will also require a trustee and a secondary trustee, if at some point the primary trustee cannot or does not want to serve.

It may seem easier to name the same person as the trustee and the guardian, but this could lead to difficult situations. A better way to go is to have one person paying the bills and keeping an eye on costs and a second person taking care of the individual.

Planning for the child’s long-term care needs to be done as soon as possible. A special needs trust should be established and funded early on, wills need to be created and/or updated, and qualified professionals become part of the family’s care for their loved one.

Having a child with special needs is a different kind of parenting. A commonly used analogy is for a person who expected to be taking a trip to Paris but finds themselves in Holland. The trip is not what they expected, but still a wonderful and rewarding experience.

If you liked this article addressing Estate Planning for Special Needs Children, read these articles: What Is the Best Way to Make Sure Children Can Handle an Inheritance? and Can I Set Up a Trust for a Child? and Special Needs

Reference: Accounting Web (Sep. 13, 2021) “How to Help Clients With Special Needs Children”

BOOK A CALL with Ted Vicknair today to find out more about how you can plan your future for your and your family’s security.