Special needs planning is specialized estate planning for the benefit of a person with a disability. Such planning not only ensures that the person with a disability has access to the gifted or inherited assets, but it also preserves public benefits qualification. Supplemental
Security Income (“SSI”) and Medicaid are two benefits commonly received by people with disabilities. SSI provides monthly cash payments and Medicaid provides comprehensive health insurance, including personal attendant care services. SSI and Medicaid have asset levels above such the person with a disability does not qualify for such benefits. Special needs planning preserves such benefits by funding a specifically drafted trust for the person with a disability, such that assets placed into the trust do not count against SSI or Medicaid qualification.
Often, parents will create special needs planning for their child with a disability. One of the reasons cited for why parents delay special needs planning or decide not to do it altogether, is that the feel unsure of what symptoms of the disability will be like down the road. It is understandable to want to know what is going to occur in the future before engaging in planning, but there are often too many unknowns. The good part of special needs planning is that it can be implemented even with many unknowns remaining. Money can be left in a trust to be managed by a specified trustee and the benefits of the beneficiary with a disability are preserved. If the beneficiary’s condition has improved such that they no longer need benefits, the assets in the trust can be used for the beneficiary’s benefit. The beneficiary is not harmed by the presence of the trust even if benefits are not needed.
As benefits can be interrupted if inheritances and gifts are made outright to someone on benefits, it is advisable to begin special needs planning as soon as possible. Given that the area of public benefits is complex and ever changing, it is advisable to seek the advice of an experienced special needs planning attorney when leaving an inheritance to someone with a disability.