| A conundrum for many Americans, especially with the | | | | federal and state entitlement programs mandate |
| growing aging population, is their estate plan. Yet, | | | | regarding a recipient's finances. |
| families that have a special needs member have their | | | | Fortunately, programs such as SSI and Medicaid |
| own puzzle to manage, which involves planning that is | | | | contemplate the limits on the funds they deliver |
| unlike others'. Particularly, a special needs loved one | | | | therefore recognizing special needs individuals' right to |
| poses a unique challenge of "how to provide" in the | | | | "quality of life" as well as their families' desire to |
| event no one is left, usually close family, to care for | | | | reserve money to this end. Special needs planning, |
| said individual. | | | | consequently, involves balancing the needs of the |
| The Problem: Typically, special needs Americans are | | | | individual and the family with the government's |
| receiving government entitlement program benefits | | | | entitlement policies. Therefore, a will and/or life |
| such as SSI or SSDI. One of the issues | | | | insurance policy is simply not enough. |
| family-caregivers face is leaving assets or a "financial | | | | A planning instrument referred to as either a Special |
| support structure" for their loved one while at the | | | | Needs Trust (SNT), or Supplement Trust, is needed. |
| same time avoiding loss, or ineligibility, of the entitlement. | | | | Such a trust can be created using a will by way of a |
| Life insurance is one of the common funding | | | | testamentary (upon death) SNT or the trust can be |
| mechanisms for the care-plan. For those unaware, | | | | made independently, which is often the preferred |
| however, SSI, Medicaid, and SSDI have strict guidelines | | | | method because of probate. The testamentary SNT |
| surrounding recipients' assets and income, even if it is | | | | would still need to go through the probate process |
| inherited - in light of this, such programs fall grossly | | | | causing a delay, whereas the stand-alone SNT avoids |
| short of being able to fund many of the "quality of life" | | | | probate altogether. In either event, the SNT and/or |
| expenditures the special needs person deserves: | | | | Supplemental Trust circumvents the income and asset |
| simple luxuries like televisions, cell phones, vacations, or | | | | restrictions by maintaining ownership and control over |
| health expenses such as dentist care. | | | | the funds and assets. A "maintenance provision" |
| The Solution: The special needs person need not | | | | therein gives the trustee authority to make only those |
| resign the notion of having funds set aside for their | | | | distributions that do not violate "quality of life" |
| "quality of life." But, their caregivers planning should not | | | | expenditures recognized as permissible by Federal and |
| be 'pigeonholed' into the "prototypical estate plan" that | | | | or State administrative agencies. The upshot for the |
| may apply to many of those without a special needs | | | | special needs family members is a reserve of funds |
| family member; this is not to suggest there is a | | | | for a better life while keeping important entitlement |
| "one-size-fits-all" plan for anyone, as each family | | | | benefits. |
| invariably has its own specific needs and goals. | | | | Before setting up a life insurance policy or transfer of |
| Nevertheless, planning considerations for those with | | | | any assets whatsoever through a will or other estate |
| special needs takes on a dimension of its own | | | | planning instrument, if the beneficiary is a special needs |
| requiring attention to (1) the goals for care following the | | | | individual it is strongly recommended by this author and |
| point in time when care is not possible as with | | | | others to seek the help of a qualified attorney or |
| incapacity or death, and (2) designing a plan that fits | | | | estate planner. |
| within the narrow regulations and guidelines that the | | | | |