It can be an enormous financial and emotional burden when a child or loved one has a physical or mental disability. You cannot help but to worry about what will happen to them when you are no longer able to provide for their care.
It is important to ensure that they have the resources to pay for the medical bills, assisted living costs, and other expenses that are unique to those with disabilities.
There are public benefits commonly available to the disabled such as Supplemental Social Security Income (“SSI”) and Medicaid. However, if the person with special needs comes into money through a gift, inheritance, divorce, or the proceeds from a lawsuit, it can endanger their eligibility for government benefit programs. In addition, even when the benefits from those programs continue to be available, they may not adequately provide for the financial security and comfort of the person with special needs.
The focus of special needs or disability planning is to ensure that the disabled person never loses public benefits and to provide for their supplemental needs. This is accomplished through the creation of a special needs trust also known as a supplemental needs trust.
A special needs trust is a trust established for the benefit of the individual with special needs. A special needs trust preserves eligibility for important benefits like Medicaid while at the same time providing assets that will fund the supplemental needs of the disabled person. Supplemental needs are those that go beyond the food, shelter, clothing, and long-term support and services provided by Medicaid. Through the use of a special needs trust, a variety of life enhancing expenditures can be made for such things as:
- Annual check-ups at an independent medical facility
- Transportation (including purchase of a vehicle)
- Maintenance of vehicles
- Materials for a hobby or recreational activity)
- Trips or vacations
- Athletic training or competitions
- Personal care attendant or escort
- Supplemental nursing or medical care
- Goods and services that add pleasure to life
- Out-of-pocket medical and dental expenses
- Psychological care
- Entertainment such as movies, shows, and ball games
- Supplemental education and tutoring
- Special dietary needs
- Attendance of religious services
- Telephone expenses
Many individuals with special needs cannot adequately make financial decisions or manage money on their own. Using a special needs trust means that you name a trustee to manage the assets placed into the trust. A trustee has a fiduciary and legal obligation to carry-out the terms of the trust, prudently manage the assets of the trust, and ensure that the disabled person benefits from the trust assets.
Great care must be taken when setting up a special needs trust as it must adhere to certain federal and state technical legal requirements which are subject to scrutiny by the Department of Social Services and the Attorney General’s Office. As a result, a special needs trust must be drafted by a qualified legal professional such as Attorney John D. Watts.
If you care for a child or a loved one with a disability, contact the Watts Law Office to setup an appointment for an initial consultation to discuss how special needs planning can help the disabled person in your life.
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