Special Needs Planning
Ensure a Secure Future for Your Child
By Daniel Khaldarov
Planning for a loved one with special needs requires more than the typical estate planning strategies. Special needs planning is a crucial step in ensuring that your loved one can maintain their quality of life, access necessary resources, and remain financially secure, all while protecting their eligibility for essential government benefits.
Understanding Special Needs Trusts
One of the most important tools in special needs planning is a Special Needs Trust (SNT). This type of trust allows you to provide for your loved one without jeopardizing their eligibility for government benefits such as Supplemental Security Income (SSI) and Medicaid. Because these programs are means-tested, meaning they are only available to individuals with limited income and resources, simply leaving an inheritance could unintentionally disqualify your loved one from receiving benefits.
A special needs trust works by holding the assets in the trust, rather than in the name of the beneficiary, allowing them to maintain eligibility for government assistance while still benefiting from the funds.
Types of Special Needs Trusts
First-Party Special Needs Trust: This trust is funded with the assets of the individual with special needs, such as a personal injury settlement or inheritance. It is often used when the person with special needs comes into a significant sum of money unexpectedly. At the beneficiary’s death, the state may seek repayment from the trust for the Medicaid benefits received.
Third-Party Special Needs Trust: This trust is funded with assets from someone other than the beneficiary, typically parents or family members. Since these assets never belonged to the beneficiary, Medicaid is not entitled to recover funds from the trust upon the beneficiary’s death, making it an effective way to provide ongoing support.
Coordinating with Government Benefits
Special needs planning involves coordinating private assets and public benefits. The goal is to ensure that your loved one has access to the best possible care and quality of life without losing the critical benefits they rely on.
For example, Medicaid covers essential medical expenses, including long-term care, while SSI provides monthly income to cover basic living expenses. However, these programs have strict resource limits. With the proper trust structure in place, you can ensure that funds are available for supplementary needs—such as specialized therapies, education, or recreational activities—without impacting eligibility for government programs.
Guardianship and Powers of Attorney
Beyond financial planning, special needs planning often includes considerations for guardianship. If your loved one is unable to make decisions for themselves, appointing a legal guardian ensures that someone trustworthy is designated to make medical and financial decisions on their behalf.
A durable power of attorney and healthcare proxy can also be valuable tools, giving a trusted individual the legal authority to act in the best interest of your loved one without the need for a court-appointed guardian.
Letter of Intent
Another important element of special needs planning is the creation of a Letter of Intent. This is a non-binding document that provides detailed instructions about your loved one’s care, preferences, routines, and needs. While it’s not a legal document, it serves as a valuable guide for caregivers and future guardians, ensuring continuity of care if something happens to you.
Plan Today, Secure Tomorrow
Special needs planning is not just about legal documents; it’s about securing a stable, secure future for your child. By creating a thoughtful plan tailored to your family’s unique situation, you can ensure that your child is protected, cared for, and able to live life to the fullest, without risking their financial security or government benefits.
At the Law Office of Daniel Khaldarov, I help families navigate the complexities of special needs planning. Call today to discuss how I can help you create a comprehensive plan that meets your family’s needs.
