Special Needs Planning

Special Needs Planning

If you currently provide care for a child or loved one with special needs (such as mental or physical disabilities), you must have contemplated what may happen to him or her when you are no longer able to serve as the caretaker.
While you can certainly plan for them to receive money and assets upon your passing, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs.  If you do not leave them any assets, the benefits provided by these and other programs are generally limited to the bare necessities such as food, housing and clothing.  As you can imagine, these limited benefits may not provide the resources that would allow your loved one to enjoy the quality of life as they experienced while you were able to care for them.  Fortunately, the government has established rules allowing assets of the individual with special needs to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust without resulting in disqualification for SSI and Medicaid, as long as certain requirements are met.
Our law firm can help you set up a Special Needs Trust so that government benefit eligibility is preserved while at the same time providing assets that will meet the supplemental needs of the person with a disability (those that go beyond food, shelter, and clothing and the medical and long term support and services of Medicaid).  The Special Needs Trust can fund those additional needs.  In fact, the Special Needs Trust must be designed specifically to supplement, not replace public benefits.  Parents should be aware that funds from the trust cannot be distributed directly to the disabled beneficiary.  Instead, they must be disbursed to third parties who provide goods and services for use and enjoyment by the special needs beneficiary.
The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s benefit eligibility.  Such life-enhancing expenditures may include:

  • Receiving annual check-ups at an independent medical facility
  • Receiving supplemental education and tutoring
  • Covering out-of-pocket medical and dental expenses
  • Being transported  to and from places and events
  • Purchasing and maintaining a vehicle for the beneficiary who can drive
  • Purchasing materials for a hobby or recreation activity
  • Funding for trips or vacations
  • Funding for entertainment such as movies, shows or ballgames.
  • Purchasing goods and services that add pleasure and quality to life. This may include computers, videos, furniture or electronics.
  • Athletic training or competitions
  • Providing special dietary needs
  • Providing a personal care attendant or escort     

Special Needs Trusts are a critical component of estate planning for people who have disabled beneficiaries for whom they wish to provide for after their passing.  Generally, a Special Needs Trust is either a stand-alone trust funded with a separate asset like a life insurance policy or is structured as a sub-trust in a revocable living trust.

Law Office of Judith A. Schening, LLC is located in South Elgin, IL and serves clients throughout Kane, DuPage, DeKalb and Cook Counties and the surrounding areas.

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