I just finished delivering a Webinar on Special Needs Trusts Planning. You can watch the replay below.
I just finished delivering a Webinar on Special Needs Trusts Planning. You can watch the replay below.
John and Mary Bell live in Jackson, Mississippi. They are now in their mid-70’s and they just celebrated their 50th anniversary. The Bells have been blessed with three wonderful children. One is a nurse, one is a school teacher, and their youngest child, Tim, is not able to work. Tim is now in his late 40’s and lives in a group home. He receives Social Security (SSI) of about $650 a month and his parents have always supplemented his income.
Mr. and Mrs. Bell lead a modest life style. Mr. Bell receives Social Security of about $900 per month and Mrs. Bell gets about $650 per month. In addition, he has a pension of $350 per month. They are able to live on this and continue to save about $250 per month. Like most of their generation, the Bells are excellent savers. In fact, they have accumulated a nice little nest egg. Their assets are as follows: Residence $60,000, 1998 Buick $2,500, Certificates of Deposit $50,000, Mr. Bell’s IRA $8,000, Savings bonds $22,000, Money market $20,000, Total Countable Assets $100,000.
Unfortunately, Mr. Bell recently had a stroke and won’t be able to come home. He moved to the nursing home right up the street. Mrs. Bell is satisfied with the care he is getting… but her worst fears are coming to pass. That’s because she can’t care for herself…her Parkinson’s Disease has progressed to the point where she can’t stay at home either… and now that she has joined her husband in the nursing home, who will care for their son, Tim? And most of all, Mrs. Bell is concerned about the money. Mrs. Bell frets over the fact that the nursing home will cost about $10,000 a month for both of them… and that doesn’t count the cost of the medication.
You have good news for the Bells. You explain to them that under the Federal and State laws, Tim is considered to be permanently and totally disabled. Since that is the case, the Bells can give all their assets to Tim… or to a trust for Tim’s benefit… without incurring any transfer penalties. In other words, normally with both spouses in the nursing home, they would pay the cost of the nursing home out of their funds until their assets were down to $6,000. Under this scenario, their $100,000 in liquid assets would last about ten months … and they would end up spending all of Tim’s inheritance.
Fortunately, the news is even better than that. Under the “transfer to a blind or disabled child” section of the Medicaid law, Mr. and Mrs. Bell can transfer all of their assets to their son with a disability and incur no penalty whatsoever. Thus, she and her husband can make a gift of the entire $100,000 and qualify for Medicaid right away! Because Tim is receiving public benefits, they would need to give Tim’s money to him in a special type of trust that would not disqualify him for public benefits. The Bell’s feel better knowing that their son, Tim, will be cared for and they have preserved their life savings. To learn more, click here.
What a Clinton, Flowood, Brandon, Madison and Metro Jackson Area Special Needs Planning Attorney Will Do for You
Special needs planning attorneys in Clinton, Flowood, Brandon, Madison and Metro Jackson Area have very specialized knowledge that can help families plan for their children’s future. There are so many things to keep straight when it comes to raising your special needs child, and focusing on what will happen to him or her after your death is not something that is pleasant to contemplate. Still, it is very important to take the time to meet with a special needs planning attorney in Clinton, Flowood, Brandon, Madison and Metro Jackson Area in order to give your child the best opportunities.
An Important Tool
Special needs planning is a part of estate planning, and one of the most common things a Clinton, Flowood, Brandon, Madison and Metro Jackson Area attorney is likely to advise will be a “special needs trust.” The reason this trust is so important is because it allows you to set aside money for your child’s future without jeopardizing his or her eligibility for government benefits such as Social Security and Medicaid. Unfortunately, leaving your child even a small inheritance can make it so he or she is no longer eligible for this kind of aid and can severely impact quality of life.
Trusts for Your Child
There are different types of trusts the attorney will go over with you. Some are funded by the person with special needs, say through an award from a personal injury case or from an inheritance. Others are specifically funded by a third party such as parents or other family members. The second kind is the special needs trust, and if it’s the right choice for you, a qualified Mississippi special needs trust attorney will be able to help you understand your options with the trust.
People to Consider
In addition to helping you set up the trust, a special needs attorney will also be able to help you determine the appropriate trustee. In some cases, this may be a family member or other caregiver. In other cases, the lawyer or firm may take care of the administration of the trust. An advocate may also be chosen. This person will be familiar with both the beneficiary’s needs and the intentions and wishes of the person creating the special needs trust.
Using the Trust
When the trust is set up, the person creating it (called the “grantor”) has a say in how the funds are to be used. For example, money can be dedicated to the daily needs of the beneficiary. Dispersal schedules can be created, as well. In this way, rather than giving someone a single lump sum, you can set up a situation where monthly allotments are made. The advocate would understand this and work with the trustee to make sure the terms were being followed in the beneficiary’s best interest. At the same time, the trustee is charged with managing the funds through investments or other means that keep the trust funded.
Of course, this is just an introduction to the possibilities of a trust. For a much fuller understanding and to get the ball rolling, we invite you to contact our Clinton, Flowood, Brandon, Madison and Metro Jackson Area special needs attorneys who are knowledgeable about the field, as well as how state laws come into play. To schedule a free Legacy Planning Session simply call (601) 925-9797 and mention this article.
Why Should You Work with a Special Needs Planning Attorney in Clinton, Brandon, Flowood and Madison-Ridgeland?
Parents of children with special needs in Clinton, Brandon, Flowood and Madison-Ridgeland face a whole extra set of challenges in addition to those of other parents. On top of physical therapy, occupational therapy, IEPs, and any of a million other details, these parents face additional estate planning needs. That’s where a special needs planning attorney in Clinton, Brandon, Flowood and Madison-Ridgeland can make a huge difference in these parents’ peace of mind.
The items listed above are just some of the things that parents of special needs kids deal with. When it comes to planning for the future, these parents need to prepare the way for their children who may not be able to work to support themselves as adults. They have to be concerned with who would be a suitable guardian for their child, what types of medical decisions should be made, and so much more. Each physical and mental disability comes with its own set of concerns, and parents want to make sure they are addressed even in the parent’s absence.
Special Needs Planning for the Future
A Clinton, Brandon, Flowood and Madison-Ridgeland special needs planning attorney will be aware of these concerns and will have some answers in place for how to deal with them. He or she will have worked with many other families, building knowledge and experience which they can apply directly to your planning.
The professional will also understand the ins and outs of the current legal system to help make sure you are maximizing your impact. For example, your lawyer can help advise you on how to make sure your child is well cared for without making him or her ineligible for Medicaid benefits. In some cases, a special needs trust may be the best approach, while there are other options that might work better in different situations.
Extending Your Loving Protection
By creating an estate plan that takes the special needs child into consideration, you and your attorney can also help protect the child from being taken advantage of in the future. It can be used to shield the child from lawsuits and creditors, as well as to designate a trustworthy financial representative who can make money decisions for the child when he or she doesn’t have the best ability to do so for himself or herself. This lessens the likelihood of an unscrupulous sales person, significant other, or “friend” who would take advantage of your child’s financial situation.
Hire a Clinton, Brandon, Flowood and Madison-Ridgeland Special Needs Lawyer Who Keeps Current
Laws do continue to change, so the best bet is to work with a special needs planning attorney in Clinton, Brandon, Flowood and Madison-Ridgeland who keeps up-to-date on changes in this particular arena. Unfortunately, you will not always be there to care for your most vulnerable children. Hiring a skilled lawyer in Clinton, Brandon, Flowood and Madison-Ridgeland can make a real difference in the quality of life that child experiences once you are no longer there to personally make the best choices for him or her.
If you have a family member with special needs, it is important to factor him or her into your estate planning. In fact, there are “special needs trusts” or “supplemental needs trusts” which can be created specifically for this purpose. Working with a special needs lawyer in Hinds County is the best way to make sure that you are setting your loved one up to be cared for when you are no longer able to do so yourself.
Special needs trusts can be set up and funded in numerous ways. The special needs trust can be either revocable or irrevocable and can spring to life upon your passing or be set up during your life. Much will depend on how the trust will be funded. If you are the only one to contribute then a trust that springs to life upon your death may be the best choice. If other family members, such as grandparent, aunts or uncles will also be contributing to the trust then it makes the most sense to create the trust now. If you are sure that the parents will be the only contributors, then you might want to consider a revocable trust, as it can be changed throughout your lifetime to reflect the choices you want to make over the course of time.
One of the biggest considerations that needs to be made is who will be the trustee. This is the person who will administer the trust which has been created to care for your loved one. Careful thought needs to go into choosing this person, as he or she will have a significant impact on the life of the person cared for by the trust. The trustee will also have access to funds and will make a lot of important decisions.
Your special needs lawyer in Clinton, MS can help you to define the role of this person through your legal documents, but you still want to choose someone who is trustworthy and has your loved one’s best interests at heart. He or she should also be very familiar with the specific needs of the person they will be responsible for, which could range from medical concerns to favorite foods and hobbies. Additionally, you want to choose someone who has the ability to create and execute a reasonable budget. One option is to name both a family member and a professional as co-trustees.
Of course, determining how much money needs to go into the trust is another major concern. There are so many factors to take into consideration. Remember that costs will likely continue to rise over time, so basing totals on today’s costs will likely not be adequate. This is yet another reason that it makes sense to work with a special needs lawyer in Clinton. He or she will be familiar with many of the most common costs but will also be able to personalize the special needs trust so it is a good fit for your particular situation.
You may find that there are some one-size-fits-all special needs trust planning tools online, but this is an area where that option is really not a good idea. No one has to tell the parent of a special needs child that every situation is considerably different. Instead, choose a qualified special needs lawyer in Hinds County for the peace of mind knowing that your child will always be cared for and protected in your absence.
Families who have members with special needs have a variety of concerns that most of the population doesn’t deal with on a regular basis. Whether you’re traveling to occupational therapy appointments, choosing the most effective medical devices, or contemplating whether to “mainstream” your special needs child, there are so many parts and pieces to keep in mind. For that very reason, you may not have even considered the need to meet with a special needs planning lawyer in Clinton.
You spend a lot of your time and energy helping your family members with special needs to get the most out of life. How are you going to keep that up if you become incapacitated or deceased? Working with an experienced special needs lawyer is a really important step in making that a reality. The attorney will help you get your affairs in order and will be able to advise you on areas that you might not even realize need attention. Taking care of these issues now means that things are in place and ready to go should you suddenly become unable to care for your family member.
Clinton Special Needs Consideration #1 – Creating a Guardianship
You likely have very strong feelings about who you would and would not like to be responsible for your family member in your absence. For example, you may feel that one of your adult children would be an excellent care taker while also being sure that you would not want your parents to be given guardianship. If you don’t specify this clearly and legally, then the decision would be up to the courts, and your opinion on the matter will have no weight at all.
Clinton Special Needs Consideration #2 – Inheriting Assets
Many special needs attorneys in Mississippi will recommend that you not leave assets to your family member with special needs. This doesn’t mean you don’t care for the person or want to recognize them in your will. The point is, if the individual inherits assets, they can cause him or her to suddenly be disqualified from various types of assistance programs. In fact, Medicaid could even view the acquisition of assets as a reason to go back and try to get payment for benefits paid out in the past.
Clinton Special Needs Consideration #3 – Setting Up a Special Needs Trust
Depending on your situation, your special needs planning attorney in Hinds County may recommend that you set up a specific trust for the family member. You will also need to determine how the trust will be funded, with life insurance being a common choice. Again, this action is intended as a way to protect the individual’s ability to qualify for certain types of benefits and public programs. In addition to possibly providing assets and funding for the family member with special needs, this kind of trust can also name someone you trust as the legal manager of those funds.
It’s hard to overstate the importance of preparing for your loved one’s future, especially when it is apparent that he or she will be dependent upon others for a lifetime. Working with a special needs planning attorney in Hinds County will allow you to create some peace of mind while ensuring you are in complianc
The average student loan for college graduates is over $23,000. Repayment of student loans has always been difficult, but for people who suffer from disabilities and little to no prospects for gainful employment, repayment can prove impossible. Everyone knows that student loans cannot be discharged in bankruptcy. However, there is an exception to student loan discharge for disabled adults that many people are unaware of.
Disabled individuals can apply for disability discharges of loans from the following programs: Federal Family Education Loans (FFEL), Perkins Loans, William D. Ford Federal Direct Loans (Direct Loans), and Teacher Education Assistance for College and Higher Education (TEACH) Grants.
To qualify the borrower must show that he or she is physically or mentally impaired, and the impairment will either result in death or that it has lasted or is expected to last more than 60 months. The statement must be supported by paperwork from the borrower’s doctor. Application for the discharge is filed with the Department of Education. If the application is approved, the loan will be conditionally discharged, provided the borrower does not engage in employment that results in income exceeding the federal poverty rate for a family of two for the next three years. Once the three-year period has passed, the loan is completely discharged.
If you know disabled individuals with student loans, pass this information along. Our firm represents elderly and disabled individuals in planning their affairs and qualification for public benefits.
Parents with special needs children must take the necessary precautions in planning for their future care. To plan for a special needs child’s future care, parents need to make sure they plan their estate accordingly. If parents do not execute an estate plan, a special needs child receiving social security income (SSI) could lose their benefits if they receive inheritance money or any other gift. However, if parents take the necessary steps in planning their estate, the special needs child will receive their inheritance without losing any benefits. See here.
This article examines the unique planning
requirements of families with children, grandchildren or other family
members (such as parents) with special needs. There are many
misconceptions in this area that result in costly mistakes in planning
for these special needs beneficiaries. It is therefore incumbent upon us – the client’s advisors – to ensure that clients understand all of
A New York trial court recently approved a trustee’s petition to reform his
deceased father’s trust in order to protect his disabled sister’s
Medicaid benefits. In Matter of Newman (2008 NY Slip Op 50127, Jan. 22, 2008).
When he died in 1988, William Newman established a trust in his
will for his disabled daughter. The will required the trustee to use
the trust income for the daughter’s benefit and gave the trustee
discretion to spend the trust principal for her support and
maintenance. Mr. Newman’s daughter lived on her own until 2006, when
she moved into an adult care facility and qualified for Medicaid. In
order to maintain her eligibility, her brother, the trustee, then
petitioned the court to reform the trust to make it a Supplemental
Needs Trust. The guardian ad litem opposed the petition, arguing that
the trustee, who was also a remainderman, had a conflict of interest.
The court approved the petition, finding that the trust meets
all of the statutory conditions for reformation. Specifically, the
court determined: 1. that the beneficiary is disabled; 2. that the
intent of the donor was to supplement her benefits; 3. that the trust
prohibits the trustee from using the assets to jeopardize her benefits;
and 4. that the beneficiary cannot compel distributions from the trust.
Finally, the court dismissed the guardian ad litem’s argument regarding
the conflict of interest, calling the analysis "restrictive" and
contrary to the intent of the donor.