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Special Needs Planning
Public Assistance Benefits
It may be beneficial for you to decide whether it would be best for your loved one to receive public assistance benefits, now or in the future. Public assistance can help ensure that your loved one's medical and care needs would be met. Certain benefits may also provide additional income to be used for housing or food. During a meeting, we will discuss the asset and income requirements for each benefit to ensure that your loved one can qualify and/or continues to maintain his or her eligibility. I’ll then facilitate a discussion one each of the benefits to assist you in choosing which benefit(s) is right for your loved one. We will discuss:
- Medicaid,
- Current Ohio Medicaid Home and Community Based Waiver Programs: Individual Options, Self Empowered Life Funding, and Level One;
- Supplemental Security Income (SSI),
- Social Security Disability Income (SSDI), or
- Medicare.
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Special Needs Trusts
A special needs trust can have a two-fold purpose. One purpose is to help your loved one maintain eligibility for public assistance benefits. The other purpose is to make sure that the assets that you would like to leave your loved one are protected and distributed in a manner that you would find satisfactory. It is not the best planning strategy to leave assets to another sibling. Those assets are then exposed to whatever issues may face the sibling including divorce or creditors. Having a special needs trust for your loved one can help ensure that they will not be taken advantage of and the assets are not spent on others. There are three main types of special needs trusts:
- First Party Special Needs Trusts - This type of trust can be set up by a parent, grandparent, the probate court, a legal guardian, or by the individual with the disability (if they have the proper mental capacity to do so). The trust is used to protect the individual's own assets that they may have received from an inheritance, settlement from a personal injury lawsuit, or the individual working and accumulating assets. This type of trust is mainly used to help qualify for public assistance benefits. It does have a Medicaid Payback Provision. This would mean that after the individual's death, a payback to the state is required, but only to the extent that the individual received public assistance benefits. This type of trust must be set up and funded before the age of 65.
- Third Party Special Needs Trust - This trust can be set up by anyone other than the individual with the disability. It is funded using the assets of a third party (ie. parents, grandparents, aunts/uncles). This type of trust allows for more flexibility in the language of the trust. It allows the family to add their own voice and considerations into the trust document. This type of trust allows the trust assets to be passed to other beneficiaries at the death of the individual with the disability. This trust can be set up as a living trust or it can be set up at death through the use of a testamentary trust. Every estate plan that I prepare has a provision to set up a testamentary special needs trust for any beneficiary with a disability at the time of death. This means that if a parent or grandparent is not quite ready to put money into a special needs trust now, they can still be assured that their loved one will be protected later on.
- Pooled Trust - A pooled trust means that the trust is managed by a non-profit organization. The non-profit chooses the trustee and the financial advisor to manage the assets. While each individual participant has their own account, the assets are pooled for investment purposes. A pooled trust may or may not have a Medicaid Payback provision depending on the circumstances. A pooled trust is a useful planning technique for two main situations. The first situation is if an individual over the age of 65 needs to establish a trust to assist with maintaining public assistance. The second situation is if a family member wants to leave money to a loved one with a disability, but there will not be anyone to help manage the trust.
Trust Administration
Trust administration services include either working with the trustee of the trust, or serving as the trustee of the trust, to ensure that proper distributions are made from the trust. It is necessary to keep accurate accounting records for a special needs trust. It is also imperative that distributions from the trust do not interrupt any public assistance benefits.
Guardianships
It may be necessary to obtain guardianship over your loved one once they turn age 18. Under the law, the individual would be deemed to be an adult and could make their own decisions. If your loved one does not have the capacity to make their own decisions, I can assist with the court process to set up a guardianship.
Caregiver Agreements/Letters of Intent
Help ensure that your loved one is cared for the same way that you would care for your loved one. A letter of intent is a written document that outlines the history of your loved one including anything from health-related matters, to education, to his or her daily habits. It can help ensure that there is a smooth transition from your caregiving to another caregiver.
Guidance on ABLE Accounts
The Achieving a Better Life Experience (ABLE) Act, created a unique opportunity for those individuals with a disability with onset prior to age 26 to set up tax-advantaged savings accounts that can help pay for qualified disability expenses. An individual can have only one ABLE account. Ohio has set up its own version of the ABLE account called a Stable Account. Contributions to a STABLE account can result in tax advantages for Ohio residents. However, it may not be the best ABLE account for your loved one. I can help guide you through what to look for when choosing an ABLE account. I also recommend looking at www.ablenrc.org for more information regarding ABLE account options.
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