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Providing Individualized Planning for Disabled Individuals
If you have a loved one with a disability, planning for their future can be difficult. Balancing the allocation of assets while still ensuring they can maintain their government benefits is a challenge, but one that can be overcome with the help of a special needs planning attorney. Financial planning tools like special needs trusts and wills allow you to set your child, sibling, or other loved one up for success even after you pass away.
By consulting with a special needs attorney, you can ensure you have all the tools you need to plan for your loved one’s future. Our team at the Law Offices of Patricia G. Micek PLLC, will work with you to use estate planning tools to allocate resources to your relative. For more information about our services and to learn more about our team, contact our law office today by calling 914-533-1756.
What is a Special Needs Trust?
A special needs trust (SNT) is a particular type of trust that allocates funding to disabled individuals. Children and adults with disabilities often rely on public benefits to pay for their medical care and lifestyle, including Supplemental Security Income (SSI) and Medicaid. Unfortunately, since these programs are need-based, having too many assets can disqualify your loved one from receiving them.
Special needs trusts allow you to set aside funds for an individual with a disability without removing their eligibility for government benefits. The person creating the trust, also called the trustor or grantor, designates a trustee to manage the distribution of assets to the beneficiary. The beneficiary, or the individual with a disability, technically does not own any assets in the trust, meaning they do not count toward resources for SSI and Medicaid qualification purposes.
Funds in a special needs trust can only be used for particular supplemental needs. Supplemental needs include education, travel, recreational and cultural experiences, and medical expenses that are not covered by Medicaid. Funds in a special needs trust cannot be used for basic necessities, including rent, mortgage payments, homeowner’s insurance, utilities, or restaurant meals.
What is a Pooled Trust?
A pooled trust is a trust created by a non-profit organization. The non-profit organization adds assets or income from the disabled individual to the trust, which are then held in a separate account for their benefit. Depending on the terms of the pooled trust, the remaining balance after the disabled person passes away must pass to the non-profit organization. Otherwise, Medicaid must be reimbursed.
A pooled trust accepts contributions from many individuals, allowing the trust to make stable investments and provide additional management services. While each beneficiary’s account remains their own, their assets are used to grow the overall trust.
Beneficiaries often work with a social worker or trust advisor to find a fund distribution plan that fits their needs. Pooled trust funds are used to supplement an individual’s government benefits and may have certain restrictions on what they can be used for.
What Are ABLE Accounts?
Created by the Achieving a Better Life Experience Act (ABLE) in 2017, ABLE accounts allow individuals with disabilities to save money without disqualifying themselves from public benefits. ABLE accounts are tax-advantaged accounts, similar to 529 savings plans for college. Funds in an ABLE account don’t count as resources for Medicaid or SSI as long as the balance is below $100,000.
Individuals can deposit a maximum amount of around $15,000 per year. The maximum amount changes every year, and it is the same as the gift tax exclusion amount for federal income tax. ABLE accounts can only be used for up to $520,000, which is New York state’s maximum for 529 accounts.
How Do I Seek Guardianship of My Disabled Child?
As a parent of a disabled individual, determining what could happen to your child after you die can be difficult. With help from our team of attorneys, you can assign a guardian to your minor child in your will.
If your child is over 18 or is nearing legal age, you must determine if your child has the capacity to make legal and medical decisions on their own. If not, you can seek guardianship of your child a year or more before they turn 18. In New York, guardianship proceedings for disabled individuals are filed in Surrogate’s Court. You could request guardianship over the person, their property, or both. You must get certifications from medical professionals, and it is highly recommended to consult with our team before seeking legal guardianship.
If your child is able to make their own decisions, guardianship may not be necessary. However, other planning documents like a power of attorney, a healthcare proxy, and a living will may be useful for their future. Our team will review the needs of your child to determine how you can best set them up for success.
How Can a Special Needs Planning Attorney Help Me?
Securing the future of your loved one with disabilities can be a complicated endeavor. Funding their lifestyle without jeopardizing their access to government assistance is essential, as is determining guardianship and who will take care of them after you pass. With help from our team of estate planning attorneys, you can explore all your resources and legal options.
At the Law Offices of Patricia G. Micek PLLC, our team has decades of experience in the special needs planning industry. We can help you create an estate plan to take care of your loved one with disabilities long after you are gone. For more information about our services and how we can help you, contact our office today at 914-533-1756.