Special Needs Planning

Estate Planning

Special Needs Planning

Virginia Special Needs Attorneys

Hook Law Center can help you maintain your eligibility for public benefits while enjoying the inheritance or settlement to which you are entitled.

If you are injured or disabled, or if you are the parents of a child with special needs, you do not want an inheritance, an award, or a settlement to threaten your entitlement to public benefits. If assets are given, bequeathed to, or awarded to an injured or person with special needs, their entitlement to public resources may be lost or reduced. Individuals with disabilities frequently need to avoid the loss of public resources such as Supplemental Security Income(SSI) or Medicaid which otherwise would be available to them.

Supplemental Needs Trusts

Individuals with special needs frequently need to avoid the loss of public resources.

Frequently a Supplemental Needs Trust can assist in the preservation of both the public benefits and the assets. A Supplemental Needs Trust is often referred to as Special Needs Trusts. There are two distinct types of Special Needs Trusts (SNTs): a third party created trust and a self created trust.

What is the difference between third party and self funded SNTs?

Third party created SNTs can be created through the mechanism of something known as an inter vivos or testamentary trust and are funded by some one other than the beneficiary or his or her spouse. They also can be created through a testamentary trust and funded by the beneficiary’s spouse. The third party created SNT provides for fully discretionary supplemental care, not a support trust. Third party created SNT’s are frequently used to provide for children or spouses with disabilities.

A self created SNT can help an injured or persons with special needs address their financial needs beyond what is provided through Supplementary Security Income (SSI) and Medicaid benefits.

Congress created two types of SNT’s that can be funded with the beneficiary’s assets. These trusts are called d(4)(A) and d(4)(C) trusts. These trusts permit the retention of a beneficiary’s resources, including inheritances and personal injury settlements, without disqualifying the beneficiary from receiving SSI or Medicaid.

A special needs trust will manage resources for the benefit of an injured or person with special needs while maintaining the person’s eligibility for public assistance benefits. While governmental agencies recognize special needs trusts, they impose very stringent rules and requirements. It is vital that any family considering a special needs trust consult an experienced Special Needs attorney.

Both third party created and self created SNTs provide benefits to a beneficiary who also receives SSI or Medicaid support and are intended to preserve eligibility for those benefits, but to avoid disqualification, beneficiaries may not retain the right to revoke the trust or direct the use of the trust assets for their own support or maintenance.

Funding a trust.

It is important that family members consider how a trust can be adequately funded to meet loved one’s needs.

In addition to creating the trust, families must consider how to fund the trust and at what levels. Funding must be realistic in relationship to the injured or person with special needs’s needs. If a family has insufficient resources to adequately fund a trust, one option may be to consider funding with life insurance.

An SNT must have a trustee who will properly manage the trust assets. The choice of the trustee is a critically important decision. In most instances, a family member will be designated as the trustee. Hook Law Center can assist family members who are trustees, or can serve as a trustee if so desired.

The ABLE Act

A new option has been made available to help people with special needs and their families save for the future while preserving eligibility for public benefits. The 2014 Achieving a Better Life Experience (ABLE) Act created a new type of tax-advantaged savings account. The money in these accounts can be used for qualified disability expenses, and does not apply to the income and asset limits for SSI and Medicaid. To open an ABLE account, an individual must have become disabled – according to the Social Security definition – before age 26.

Individuals may have only one ABLE account, and total contributions to that account, including from family members and friends, are limited to $14,000 per year. The funds may be used for expenses such as housing, education, transportation, health care and assistive technology. Hook Law Center can help you set up an ABLE account and advise you regarding how such an account will best fit into your family’s special needs planning. For more information, click here.

Special Needs Planning Questions?

We can help! Speak with an attorney today!