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Special Needs Estate Planning

Serving Clients in Austin and the Surrounding Area

An inheritance for a child with special needs may be a lifeline relied upon to maintain the child’s lifelong standard of care.  Yet, owning more than $2,000 can disqualify a person with special needs from important means-based government benefits.  If you have a loved one to whom you want to leave assets as part of an inheritance but are concerned about disqualifying them from benefits, consider creating a special needs trust.   At Nickerson Law Group, we have helped hundreds of families who have a loved one with a disability.

Ms. Nickerson serves on the Board of Trustees of Marbridge, a nonprofit organization in Austin where 275 adults with intellectual disabilities are given unparalleled opportunities to learn and experience life.

Guardianship

Parents who have a child with special needs often assume that they will automatically continue to be the legal guardian of that child when he or she becomes an adult at age 18 and continue thereafter for the child’s entire life.  Although it may be obvious to a parent that their child does not have capacity to make informed decisions, legally an adult is presumed competent unless otherwise deemed incompetent by a legal proceeding.

Legal options exist that protect adults with special needs and allow someone else to make decisions.  The most extensive option is a guardianship of the person, which requires filing a court case. Once appointed by a court, a legal guardian is able to make medical, educational, and care decisions for the person with special needs and decide where that person should live.

We are familiar with the guardianship courts and processes in central Texas and can help make this difficult decision as smooth as possible.

An Overview of Special Needs Estate Planning

There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special Needs Trusts.

  • Support Trusts:  Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.
  • Special Needs Trusts:  For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits.

There are two types of Special Needs Trusts:

  • Third-Party Special Needs Trust:  Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.
  • Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.

Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.

Special Needs Estate Planning Online Resource Center

Planning for your loved one with special needs requires extensive research to become a well-educated advocate. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. —-FIRMNAME—- provides assistance to you and your family in addressing your unique concerns. Our law firm hopes this Special Needs Resource Center provides you with a quick reference to find the additional resources you may need.

  • Social Security Resources:
    Benefits for Children with Special Needs
    Social Security Benefits Eligibility Screening Tool
  • Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, education — all without interfering with the beneficiary’s SSI, Medicaid or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer.
  • eParent.com: Online resource for the special needs community, including families, caregivers, physicians, allied health care professionals, and teachers.
  • The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
  • National Academy of Elder Law Attorneys: The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations and others who work with older clients and their families. The Academy provides information, education, networking and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
  • National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
  • Center for Parent Information and Resources: The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this list of states and territories to find the PTI or CPRC that serves your area.
  • Annual Disability Statistics Compendium: This publication, the first Compendium, focuses on state-level statistics published by federal agencies.

Calculating Your Loved One’s Future Financial Needs

This free questionnaire can help you project the future expenses of a child with special needs.

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