Special Needs Planning

If you have a child with disabilities, you know that planning for the short-term is the way to stay on top of meeting your child’s unique daily needs. Just as important, however, is developing a plan for how your child will be cared for in the future when you are no longer around to provide that care. There are a number of considerations to make when engaging in special needs planning.

Special Needs Planning generally refers to the maintenance of means-tested public or government benefits. Usually, this involves SSI and Medicaid, but there could also be state-based programs like food stamps or Supplemental Assistance, or generally other resources or agencies that provide resources to disabled individuals whether that be children or adults, and the maintaining of eligibility for those benefits.

Special needs planning is a part of estate planning in which the parents of a disabled child set up the legal documentation necessary so that, at the time of their deaths, the child’s care will be legally transferred to another authority and financial support and inheritance for the child will be provided for in a manner that will not result in a loss of benefits that the child is receiving for care. The documents and actions often involved in special needs planning include the following.

The creation of a Special Needs Trust. 

A trust is a form of ownership of a property, investments, or other assets in which a trustee manages the asset for the benefit of someone else. A special needs trust allows the inheritance of a disabled person to be managed by a professional in a way that ensures that the disabled person continues to meet the financial eligibility criteria to continue receiving their disability benefits.

The development of a Care Plan for the disabled child (also known as a letter of intent). 

As its name suggests, this is a form of special needs planning in which a document is created that guides a future caregiver in how to provide care for your loved one. The document generally begins with your loved one’s daily routine, required medications, life goals, and plans. You can add or change the information contained in the document over time as your disabled child’s needs and desires change. In addition to providing a handbook that someone can use to step in and provide daily care for your child, the document also is a good jumping-off point for determining what other plans need to be put in place.

Creating an ABLE account for your child. 

This is a tax-advantaged account that allows families to build up savings for the child without harming their eligibility in benefits programs. If money that is taken from the account is use for qualified disability expenses, such as rent, food, transportation, education and employment training, health care, or personal support services, the contribution is tax-free.

What are the Benefits of Special Needs Planning?

The benefits are generally means-tested, meaning that there must be a financial necessity in order to receive them. While disability is a threshold requirement, the person has to be disabled to the point where they can’t support themselves and can’t achieve what’s called “substantial gainful activity” if they’re an adult.  If they are a child and ave marked or severe impairments that will not resolve themselves for a period of 12 months or will result in death at some point,  special needs planning allows us to protect eligibility for public benefits and medical care in the future, regardless of what happens in life.

When Should I Start Special Needs Planning?

As medical advances continue to prolong the lives of those with severe health issues, it is becoming more common for disabled individuals to outlive their caregivers. Unfortunately, it is not uncommon for families to fail to put a plan in place for the provision of care for their disabled child until they’re faced with an emergency, such as their own health concerns or the loss of a spouse. The truth is, if you have a special needs child who will require a higher level of financial and personal support throughout their life, it is never too early to start the special needs planning process.

Who Needs Special Needs Planning?

Special needs planning is crucial for those who have a physically or cognitively disabled child or other individual under their care for whom they are responsible for providing financial support and assistance with daily care tasks and who stand to benefit from their estate upon their death. Special needs planning is also helpful for the family’s support network of providers, caregivers, and friends so that everyone is on the same page as to the care of the disabled person in the event of their parent or guardian’s death. Not only does special needs planning resolve issues of money management and asset protection, but it is also important to discuss guardianship: getting someone appointed, whether that be a parent or relative or a third-party, to make legal decisions on behalf of an incompetent individual – generally someone who is disabled and cannot make decisions for themselves.

What Does Special Needs Planning Involve?

When discussing eligibility, there are two main factors at play. SSI and Medicaid both require not only meeting the disability threshold but also that a person has below a certain level of assets. Countable assets are generally assets other than a personal residence and one vehicle and the sorts of things that are required for support and daily activities. Countable assets are generally liquid accounts (such as checking/savings accounts). Essentially, if you have certain assets, they should be used for your support first, and Medicaid or SSI should be the payer of last resort for these sorts of needs and benefits.

What Special Needs Planning is attempting to provide  is to maintain and preserve those benefits in the event of an unexpected inheritance or gift to the beneficiary of those benefits. The way to structure the planning is to make sure that an inheritance or gift is going to a beneficiary’s trusts 529(a) or ABLE account instead of going to them directly. The assets that go to them, whether that be by inheritance or gift, are not actually received directly by or available to the beneficiary. They’re essentially being held for that beneficiary’s benefit, either by the Trustee of the Trust or by a guardian on a 529(a) Account (529(a) and ABLE are the same thing, but can be used interchangeably).

Who is Special Needs Planning Not Right For?

If you are a family who has substantial means and a high net worth, and can potentially afford to self-fund the treatment for this individual, then Special Needs Planning may not be the best option for you. The nature of ownership in Special Needs Planning is in a protected capacity – one where the beneficiary does not have direct access to the assets. If they don’t necessarily need to preserve means-tested benefits, it may actually be a disservice to put them to put those assets into protective capacity that deprives ownership and deprives full use Otherwise that person could pay for their needs individually – over and above what they would normally get from SSI or Medicaid. It may be in the person’s best interest to allow them to have full access to those assets.

Do I Just Need to Create a Special Needs Trust?

Special Needs Planning encompasses a lot more than just the creation of trust or the creation of a 529(a), it’s actually looking at the totality of the circumstances – the entire comprehensive plan – and making sure that there’s financial aspects  involved as well. It is important to make sure that everything is coordinated with financial advisors and CPAs in order to make sure that everyone is on the same page, that the legal aspects are married with or collaborative with the financial aspects so that if something does happen, unexpectedly or not, the disabled individual should have the funding to be able to support themselves throughout the rest of their life.

Part of that is working with financial advisors and planning out what is called a “life care plan” to forecast what types of medical expenses they could encounter that may be over and above what their benefits may cover, or in the event that Medicaid is lost or is removed entirely.

Do I Need a Lawyer for Special Needs Planning?

Having an experienced special needs lawyer on your side is an important part of special needs planning. An attorney can provide assistance that includes:

  • Assistance in creating trusts or other accounts that will allow you to provide a financial safety net for your loved one.
  • Guidance as to the different federal and state benefit programs and how to set up regular contributions for your loved one’s care without impacting their eligibility for those programs.
  • The establishment of a care plan that will allow an individual to step in and take over daily care of your disabled child in the event of your death.
  • Knowledge as to the creation of other legal documents necessary to ensure the continuity of your loved one’s care. Some of the documents that can be considered include a power of attorney, guardianship, or a health care proxy.
  • Access to other resources around the community such as organizations or specialists that can be of benefit to the client and their special needs child.

Contact us right away to speak with a special needs planning attorney and begin the process of special needs planning for your loved one.


Frequently Asked Questions

What is the purpose of a special needs trust?

A special needs trust is designed to help a person who is physically or disabled or chronically ill to retain assets or continue to receive income without impacting their ability to qualify for public assistance benefits.

What does a special needs planning attorney do?

A special needs planning attorney will be able to advise you on the necessary documents and plans in order to protect the financial interests of an individual with special needs. They can also assist in setting up guardianship, conservatorship, or other necessary documents that detail the plan for the care of the individual.