Special Needs Considerations

Many of us have the privilege of knowing a special someone who experiences life from a different vantage point – perhaps one with specific physical challenges or unique cognitive impairments.   One special person in my circle involved a man whose intellectual disability limited his ability to live independently, but whose special needs didn’t inhibit him from singing at the top of his lungs, dancing the polka merrily with his mother, or routinely asking for seconds and thirds of apple pie at family dinners. He brought and received happiness, just as any other family member or friend.  

However, families with a special needs member have to plan differently when it comes to estate planning. Special circumstances of any kind simply require additional considerations regarding the management of medical care and finances. While care plans will greatly vary with each individual, there should be some documentation of medical records, prescriptions, therapies, routines, and such; accordingly, the remainder of this article will focus on finances.  

Because the cost of medical or custodial care can be extremely costly for those with special needs, many families rely upon government assistance. When that assistance is based upon a financial assessment, it is imperative that families consider what effect an inheritance will have on the individual receiving the aid. For example, those receiving Medicaid assistance may be subject to a $2,000 asset limit. Even a modest inheritance from a relative or friend could present an unintended interruption in benefits.  

One of the main planning tools to avoid this predicament is the use of a trust, often referred to as a “Special Needs Trust” or “Supplemental Needs Trust” (both abbreviated as SNT). Although there are the usual trust considerations of fund size and trustee, an SNT can provide a source of private funds for the special needs beneficiary without affecting any public benefits he or she may be receiving now or in the future. This can become an extremely important supplemental fund, as public benefits often cannot provide for all things essential to maintaining a quality of life.  

Typical examples of “supplemental” needs may include a computer, travel, and entertainment. While these may be items that family and friends cover during their lifetime, how will that continue at death? If they leave funds directly to the special needs individual, that money may have to be spent quickly to restore certain benefits. However, if an inheritance is properly protected through a trust, funds can be made available for a longer period of time.  

And if your special someone loves to dance like my uncle, there will have to be some funds available to purchase Wii – Dance the Polka!

Jennifer R. Luitjens is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, a non-profit organization accredited by the ABA. She lives in Jericho and practices in South Burlington with the Jarrett Law Office. This article is for informational purposes only and is not intended to constitute comprehensive or specific legal advice. The author stresses the need to engage appropriate legal and financial professionals when devising your individual estate plan.