Planning for a loved one with special needs requires careful consideration to ensure their long-term well-being and financial security. Special needs planning encompasses a range of strategies, including establishing special needs trusts, guardianship, and exploring alternatives like supported decision-making agreements. These tools are designed to protect your loved one’s assets while ensuring they continue to receive essential public benefits and have the support they need.
At Fletcher Tilton, we understand families’ unique challenges when planning for the future of a loved one with disabilities. Whether you need to set up a special needs trust, establish guardianship, or consider alternative options, our experienced attorneys will guide you through every step, providing personalized solutions that align with your family’s needs and goals.
What Is a Special Needs Trust?
A special needs trust (SNT) is a legal arrangement designed to hold funds and assets for the benefit of an individual with disabilities. The primary purpose of this trust is to ensure that the beneficiary retains eligibility for means-tested government benefits such as Medicaid and Supplemental Security Income (SSI). These programs often determine eligibility based on the individual’s financial assets. Receiving substantial sums through an inheritance or other sources could disqualify them from receiving these essential benefits.
Assets placed within an SNT are not considered direct assets of the beneficiary for government evaluations. This distinction is critical because while government benefits cover basic needs, the trust can provide supplementary expenses, including specialized therapies, educational opportunities, recreational activities, and other enhancements to the beneficiary’s quality of life.
Types of Special Needs Trusts
Understanding the different types of special needs trusts is crucial for determining the best fit for your situation. Here are the primary types:
Third-Party Special Needs Trust
A third-party special needs trust is the most common type for families who wish to leave an inheritance or gift to a loved one with disabilities. Parents, relatives, or other benefactors typically fund this trust using assets that have never belonged to the disabled individual.
First-Party Special Needs Trust
Also known as a “self-settled” trust, a first-party special needs trust is funded using the assets of a person with disabilities. This trust is often created from a legal settlement, inheritance, or other assets the beneficiary owns.
Pooled Trust
A pooled trust is managed by non-profit organizations that pool resources from multiple beneficiaries while maintaining individual accounts for each. The funds are collectively invested, potentially earning higher returns. Upon the beneficiary’s death, some funds may remain with the trust to benefit other individuals with disabilities, while others may reimburse the state for benefits received.
At Fletcher Tilton, our experienced trust and estate attorneys can guide you through this decision-making process, ensuring that the trust you establish maximizes benefits and minimizes potential drawbacks.
Decision-Making Options for an Individual with an Intellectual/ Developmental Disability
Upon reaching the age of emancipation at 18 years, an individual is presumed to be legally competent to make financial, personal and health-care decisions without any support or guidance. However, the capacity to make informed decisions is a highly individualized matter. Considerations of promoting self-determination, autonomy, and skill development are to be balanced with concerns about a variety of risks faced in making important decisions. There is no “one size fits all” when considering decision-making options upon reaching the age of emancipation.
At Fletcher Tilton, we work with our clients to explore a variety of decision-making options that may be appropriate for a family member with an intellectual and/or developmental disability. These options range on a continuum from least restrictive to most restrictive, including supported decision-making agreements, durable powers of attorney, health care proxies, and guardianship.
Coming of Age – Transition Planning to Adult Services
An important element of special needs planning is understanding what resources, services and supports exist for adults with disabilities at the state, federal and local level. It is critically important to understand the basic eligibility requirements and the process for accessing and maximizing eligibility for those benefits. We work with our clients during the transition process to adult services so they are informed about these issues and are equipped to make the appropriate planning decisions for their situation.
Why Choose Fletcher Tilton?
At Fletcher Tilton, we understand the unique considerations involved in special needs planning. When you work with us, we align the trust with your family’s specific circumstances and needs through personalized consultations. Our up-to-date knowledge of local and federal regulations ensures your trust is built on a solid foundation. Contact us today for experienced guidance and support on special needs planning.