Special Needs Planning

For parents of children with special needs, the death of a parent often raises a big question: What happens now? Parents of autistic and mentally or physically handicapped children know their children have special needs. And those special needs generally don’t disappear with age. The Special Needs Trust is for people who know they are not going to be around forever and want to leave something to ensure the child’s care.

 Parents generally want their child to be cared for, but restrictions on eligibility for Medicaid and government benefits make doing so sticky. By putting a special needs child in your Revocable Living Trust and eventually granting these children an inheritance, parents leave them ineligible for government help. For a child to receive health insurance through Medicaid, they cannot have more than $2,000 in personal assets. And help through any government funded assistance program means the child must have little personal net worth. It is important for the child to receive health insurance through Medicaid even in affluent families. Not only does it provide a safety net when anything that could happen does happen, but it also facilitates access to certain services and machines. Some government agencies can reach durable medical equipment faster or more easily than private individuals.

Additionally, the inheritance left to a child runs the risk of being used up by the state.  When determining the amount of aid needed, the state takes all assets into account. Before providing services to the child, the state uses up any inheritance in the child’s name – leaving little left for any needs outside the very basic costs of living. Fortunately, a Special Needs Trust makes it possible, in the event of the parents’ death, to continue providing the child with health insurance through Medicaid without abandoning their other needs such as transportation, vacations, special dietary needs, entertainment, etc. Assets in the trust will not count against the child. So while Medicaid, Social Security and/or assisted living help the child with living and health costs, the Special Needs Trust allows for a quality of life above the basic necessities.

Loved ones with disabilities who may not be completely independent as an adult should have some planning of their own to provide resources to fund a lifetime of care. Preparing for your loved one’s future ensures that the individual will not have to depend wholly on community and government support, which may be limited or even unavailable in the future. Your comprehensive estate plan can provide a set of instructions that makes the transition of your family’s resources as easy as possible when the time comes. Your plan can also preserve the disabled person’s eligibility for governmental benefits with the use of a properly drafted Special or Supplemental Needs Trust.

Knowing parents will not be around forever should not cause stress and fears of substandard living. Special needs children deserve a life of happiness and stability as much as anyone else. And with a little planning in advance, the Special Needs Trust can help make it happen.