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Naples Estate Planning Lawyer > Naples Special Needs Planning Lawyer

Naples Special Needs Planning Lawyer

If you have a child or grandchildren with special needs, you probably are well aware of the additional costs and challenges they are likely to face into adulthood and throughout their lifetime. It’s a wonderful thing if you are able to help provide for their needs, but simply gifting them funds or leaving an inheritance may actually do more harm than good. Many children and adults with special needs rely on government assistance to receive necessary services, but participation in these programs is often needs-based. Funds from a concerned family member can be counted as assets to the individual with special needs, raising their income above the threshold and rendering them ineligible for government aid.

Fortunately, there are ways to make gifts or leave inheritances to family members with special needs without jeopardizing their government assistance. As a Board-Certified Specialist in Wills, Trusts & Estates, Naples special needs planning lawyer James R. Nici can guide you through the proper Estate Planning steps to provide the help you are able to give without unintended or adverse consequences.

How can Estate Planning account for children with special needs?

About 15% of children in the U.S. have special health care needs, according to the United States Department of Health and Human Services. In other cases, a healthy adult may become disabled due to a car accident, workplace accident or disease and require special, costly care. A well-crafted Trust can help pay for long-term care in these situations, even when the individual’s medical needs have not yet been fully identified.

Special Needs Trusts

A Special Needs Trust can help meet the needs of a grandchild or future grandchild diagnosed with serious, long-term disability. A Special Needs Trust, also known as a Supplemental Needs Trust or SNT, is a third-party trust established for the benefit of a person with special needs. Such individuals often rely on government support from Social Security Supplemental Security Income (SSI) or Medicaid, but a person receiving help from these programs can’t take in more than $2,000 of income in a year to remain eligible.

With a Special Needs Trust, legal title to the assets in the trust fund rest with the trustee, and the beneficiary only holds an equitable title to the property. The Trust property, therefore, is not counted as assets of the beneficiary and are not “countable income” for the purpose of determining eligibility for SSI or Medicaid.

Although it’s usually parents or grandparents who establish a Special Needs Trust, an SNT can be created by anyone for the benefit of another. For example, an older sibling, cousin, or other concerned family member or friend could set up a Supplemental Needs Trust for a person in need. A Special Needs Trust can be funded during the grantor’s lifetime or through a Will, Trust, life insurance policy, retirement benefits, or other means.

Since legal title rests with the trustee, the Trust fund is protected from the beneficiary’s creditors, even for liabilities such as credit card debt racked up by the beneficiary. As a third-party Trust, you can also name a successor beneficiary, so neither creditors nor a government agency can come after Trust funds for debt payment or reimbursement of government services after the beneficiary’s death.

Litigation Special Needs Trust

When a child or adult is injured in a car accident, birth injury or negligence, the person may receive a sizeable settlement in a personal injury or medical malpractice claim to help pay for skilled nursing care or other ongoing or future medical costs. Such injuries can result in traumatic brain injury, spinal cord injury, or developmental disabilities that require a lifetime of additional care and support. In some cases, a Litigation Special Needs Trust may be required by the judge, plaintiff or defendant as a feature of the settlement or jury verdict.

A Litigation Special Needs Trust is an Irrevocable Trust that does not count as countable income for programs such as SSI or Medicaid and will not endanger the individual’s ability to benefit from these programs. The beneficiary can use Trust funds to pay for needs and services that aren’t covered by SSI or Medicaid, from education and extracurricular activities to hobbies, entertainment and travel.

A Litigation Special Needs Trust is a first-party Trust. Unlike with a third-party Special Needs Trust, the government may seek reimbursement after the beneficiary’s death. This eventuality is a factor to be considered when setting up a Litigation Special Needs Trust or looking at other planning options.

Medicaid and Long-Term Care Planning

Regardless of special needs, all persons should consider long-term care planning in their estate plan. Americans, on average, are living longer and healthier lives, but a stay in a nursing home or other long-term care facility remains a distinct possibility that should be considered and accounted for. Nursing homes and assisted living facilities can cost anywhere from $4,500 to $13,000 a month in Florida, depending on the needs and services provided. A stay for even just a couple of years can wipe out savings for many elderly couples who did not plan for such an expense. Medicare, unfortunately, does not pay for long-term care. Medicaid does cover long-term care, but remember that Medicaid is needs-based. The right kind of Estate Planning and Trusts can help ensure Medicaid eligibility without endangering valuable income for a spouse or planned inheritances.

Federal law allows nonlawyers to assist applicants in applying for Medicaid, but some Medicaid planning can only be done by lawyers, per the Florida Supreme Court. This includes drafting personal service contracts, preparing and executing Qualified Income Trusts, and giving legal advice on Florida law and Medicaid. Make sure you are getting appropriate, qualified legal help with Medicaid planning by consulting with a skilled and experienced Estate Planning lawyer.

Sound, Strategic Estate Planning for Individuals with Special Needs in Naples and Beyond

In Naples, Bonita Springs, Marco Island, Estero and surrounding areas in Southwest Florida, call the Board-Certified Specialist in Wills, Trusts and Estates at Nici Law Firm, P.L., at 239-449-6150 or contact us online for quality Estate Planning specifically designed to address individuals with special needs.

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