The Best Way to Help Your Special Needs Child Enter Adulthood

April 3, 2023Filed Under: Elder Law, Special Needs

There are practical and legal steps to take when planning for your child with special needs as they turn eighteen and become a legal adult. Begin well before their birthday to ease the transition and ensure they continue receiving their government benefits as an adult. If they require life planning and decision-making oversight, parents need legal documents to act on their child’s behalf.

Benefits Programs

If your child receives benefits from SSI or SSDI (as a minor on a parent’s work record), when the child turns eighteen, the Social Security Administration (SSA) will automatically review their file. Minors and adults have different tests the SSA uses to determine benefits eligibility. The adult benefits criteria investigate if your child has a lasting mental or physical impairment that will “result in the inability to do any substantial gainful activity.” Your child may lose benefits or have to appeal a denial because of adult eligibility rules.

Income requirements are different too. Minors are eligible for SSI using their parents’ resources and income. Adult eligibility only includes their resources and income. Under adult eligibility rules, they might qualify for SSI, when as a minor, they did not.

Government Requirements

These government benefits programs require your adult child to have a driver’s license or a state-issued identification card. Be sure to have their Social Security card readily available as well. Your child might need a bank account to accept employment or SSI checks (in separate accounts). You might help your child register to vote, and if a male, they will submit Selective Service information.

Practical Steps

If your child with special needs has intellectual disabilities, they should take an adult IQ test between seventeen and eighteen. The SSA considers IQ test results when assessing if your child qualifies for benefits. A test result of 70 or below may ease the qualifying process.

Legal Steps

If your child with special needs continues to require significant help with activities of daily living, you will need to create a guardianship. This court process takes time to access guardianship petitions. A special needs attorney can guide you or recommend a durable power of attorney instead. Every child and their family’s situation is unique. There may be intellectual or developmental disabilities, mental illness, or a combination.

Get Organized

There is a lot to think through, and having the information you need to make a thorough plan is crucial. Consolidate the information and paperwork in a specific location (file cabinet, folders, or personal computer). If you opt for digital copies, keep the data secure but let one other trusted person know your usernames and passwords. You’ll still have paperwork requiring a physical file, even if you choose to scan most of it.

Data gathering helps determine your legacy choices to effectively plan for your child with special needs and your other children as they become young adults. A special needs trust can help your child with certain expenses without compromising their government benefits. For a special needs attorney to effectively help your child, they must also understand your situation and how it affects everyone involved.

Personal Information Document

Create a document listing your personal information and your child’s, like:

Name, nicknames
Location
Date of birth
Phone numbers
Social Security numbers
Medicaid, SSI, and SSDI benefits information

Have a separate folder containing the physical copies of:

Birth certificates
Military service records
Passports
Deeds
Insurance policies
Social Security cards
Usernames and passwords
Other relevant records

Identify and create an emergency contacts document for you and your child. Include individuals such as your:

Spouse, partner, or significant other
Former spouses
Other children
Siblings
Parents

You may include trusted service people who help you in your household with whom your child is familiar. Identify an individual you want to care for your child in case of an emergency if you are not available.

Medical History and Medical Providers

Create a document listing your medical history and providers for you and your child, including:

Names and contact information for primary care providers
Specialists
Medications
Allergies
Significant family history
Insurance company with policy numbers
Employer retiree coverage
Health insurance
Medicare or Medicaid information

If you have prepaid your or your child’s funeral, burial, or cremation, include the information here. If your child is still attending school, include their individualized education plan and counselors and teachers who work with them.

Financial Data

Assess your gross and net amount of each source of income via employment, Social Security, SSI, etc., and the current value of each asset, death benefits where applicable, and all beneficiary designations associated with the asset. Include:

Policy numbers
Contact information
Financial advisors
Recent tax statements
Recurring bills, online or automated
Your child’s representative payee accounts and special needs trust accounts

Legal Documents and Information

Collect all current legal information, such as names and numbers for:

Lawyers
Attorneys in-fact
Healthcare agents
Beneficiaries
Trustees
Personal representatives

Include a copy of your will, powers of attorney, and health care directive.

Accounts and Passwords

Create a list of your usernames, passwords, and security questions for:

Online banking
Bill-pay
Email
Facebook
Photo storage
Income-generating online businesses

Keep this data secure; however, ensure someone you trust knows where to find them. If your child has an online presence on social media or school accounts, do the same for them.

Create a Letter of Intent

A parent of a child with special needs will need to create a Letter of Intent addressing their child’s medical, family, and education history. It should include resources that provide them with assistance, employment guidance, and social, behavioral, and personal relationship information. It may list activities your child enjoys, daily activities, interactions, and hopes and desires for their future.

Meet with your Special Needs Attorney

Begin special needs planning with your special needs attorney, providing the data you’ve gathered. With a full picture of your child’s and family situation, your lawyer can start to address specifics.

Where will they live when they are 18?
What impact does that have on their SSI and SSDI qualifications if they are still under your roof?
Will their living situation impact other government benefits programs?

Will your child continue to attend school? In many US school systems, an individual may remain in K-12 education until the end of the school year when they turn 21. Afterward, they may pursue adult education, perhaps geared toward future employment.

Does your child’s situation require guardianship, or will durable powers of attorney suffice? As the parent, you will likely be the guardian or power of attorney. However, you must still identify backup individuals to step in should you become incapacitated or die.

If it is reasonable, involve your child, letting them play an active role in the planning. Understanding basic life and independent living skills like handling money, time management, and accessing information and services help them to prepare. Involving them introduces personal responsibility and, for some, the idea of working and earning money, empowering your adult child to think about what lies ahead.

Each child’s circumstances and family situations are vastly different. However, there are certain steps you can take to compile and organize the necessary information for the next stage of your child’s life. The sooner you begin a proactive planning process and involve a special needs attorney, the better the outcome will be.

We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

Children With Special Needs: Managing Their Money Over Their Lifetime

June 13, 2022Filed Under: Estate Planning, Special Needs

The estate planning of children with special needs presents a unique challenge. Optimizing your estate to use, enhance, and enrich assets for your special needs child while maintaining their enrollment in public benefits programs requires careful planning. An estate planning attorney can prepare a special needs trust to accomplish these and other goals you have for your child.

A special needs trust can meet strict financial eligibility rules for means-tested assistance programs because the assets held in the trust are not directly available to the child. A trustee provides benefits to the child via the trust. Parents select this trustee with great care because they will act as the child’s money manager, ensuring proper financial supervision after the parents die. A letter of intent is also a powerful tool to guide the trustee to make decisions that best benefit the child’s unique needs.

In most cases, your special needs child will benefit by selecting a non-family member who is independent to act as your special needs trustee. The range of options includes:

A parent, sibling, or another relative, which can be risky,
An estate planning attorney,
A financial institution or a trust company,
A non-profit organization, particularly one with special needs experience, or
Co-trustees, such as a trust company, acting in conjunction with a family member.

Each option has advantages and disadvantages that require close counsel with your estate planning attorney or financial advisor before selecting your trustee.

The creation of your special needs trust can happen while you are living or at the time of your death. A last will and testament can incorporate creating the trust, known as a testamentary trust. Parents often set up the trust while alive, known as a living trust (inter vivos trust). The living trust has advantages, including the avoidance of probate, the permission for other family members to make trust contributions (usually grandparents), and the opportunity for a co-trustee to experience what it is like to administer the trust.

Whether or not your trust is revocable or irrevocable affects tax consequences. Generally, you’ll want to choose a revocable trust if the goal is to maintain maximum control over the trust and income tax considerations aren’t a concern. Establish an irrevocable trust when there are concerns regarding income tax consequences, particularly if the trust funds exceed one million dollars. In this instance, both federal estate and gift taxes may apply to the trust.

While there is much to consider and decide, the crucial step to providing for your special needs child is to make it legal. Verbally telling your family how to care for your child is insufficient. In the absence of a will, testamentary trust, or living trust, the state in which you live will determine the outcomes of your estate’s distribution. This situation is not a viable option for a special needs child or any of your children.

Receiving proper legal guidance to implement your estate plan using appropriate trusts is crucial to maintaining a healthy lifestyle for your special needs child. Do not attempt to craft these legal documents on your own, use existing forms, or copy some internet template. Each special needs child requires careful considerations that are unique to them and the challenges they face moving forward. With so much at stake, a qualified estate planning attorney with expertise in special needs planning will best suit your wishes and the child’s needs. Protecting public benefits such as Supplemental Security Income (SSI) and Medicaid and establishing a special needs trust through your estate planning can best achieve these goals. We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.

Avoid These Mistakes When Planning for a Disabled Family Member

December 13, 2021Filed Under: Estate Planning, Special Needs

Did you know the largest single minority in this country are the 58 million Americans five years of age or older that are identified as special needs? The majority of federal and state benefits available to help persons with disabilities are needs-based, meaning income and assets are strictly limited and can often be misinterpreted, resulting in costly mistakes.

One of the most common mistakes a parent or loved one makes is disinheriting their family member with special needs. The reason is often that the family believes other siblings will step in and take care of the disabled family member. However, this can lead to numerous problems, especially if the non-disabled sibling gets sued, divorced, or otherwise loses the money left to them.

Another common mistake is failing to create a properly drafted trust to qualify the disabled family member for government benefits that can help pay for costly medical and/or living expenses. Qualifications for government benefits like Supplemental Security Income (SSI) or Medicaid dictate that the disabled individual has no more than $2,000 in assets. If your disabled loved one has assets above this threshold, they will have to be “spent down” to qualify for government assistance or otherwise protected in a properly drafted trust.

Well-meaning friends and extended family may not understand the complexity of disability benefits and give a disabled loved one money or assets that would disqualify them for state and federal benefits. It is especially difficult if the disabled person already has benefits and becomes disqualified because the “needs-based” review discovered additional funding putting them over the $2,000 asset limit. It is best to avoid this situation as it is a big hassle to re-qualify your dependent for government assistance.

Be wary of crowdfunding sites like GoFundMe to benefit your loved one with special needs. In the absence of qualified legal planning, these donations can disqualify SSI, Medicaid, food stamps, and section 8 housing. A well-meaning fund campaign could cut the benefits of a disabled person and make their living circumstances worse than before.

What to do? Plan ahead! There are several ways to provide for your special needs dependent and stay within government guidelines for additional benefits. One of the best ways is to establish a special needs trust that has the specific purpose of supplementing federal and state assistance programs. By doing so, a disabled loved one can benefit from government programs and have additional money to supplement what those programs provide.

There are strict rules when it comes to creating special needs trusts for a disabled family member. There are also restrictions on what the money can be used for. We can help you determine what type of trust is best based on you and your loved one’s particular circumstances. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.

It Is Crucial for Parents With A Special Needs Child to Prepare an Estate Plan

November 22, 2021Filed Under: Estate Planning, Special Needs

Medical and health care developments have made it feasible for dependents with special needs to live higher-quality lives than ever before. Many scientists regard the term special needs as a euphemism for disability. Yet, the difference between the two terms is primarily one of acceptance and preference as both terms describe the four major types of disability: physical, developmental, sensory impaired, and behavioral/emotional.

When you have a child with special needs, it is crucial to plan their future with the utmost care as they will meet additional challenges to care for themselves and their lives. According to the US Census Bureau, between the years 2008 to 2019, the biggest increase in special needs was the experience of cognitive difficulty, which saw a large jump in prevalence.

Careful estate planning for parents with children of special needs is necessary to ensure government benefit access remains without foregoing family support. Below are some basic planning tips to consider to protect your child with special needs. If you would like to explore these options in more detail, please give us a call to set up a confidential meeting.

While your child is a minor, be sure you and anyone caring for your child has signed appropriate directives that specify who should care for your child in the event you are unable to. You may also consider preparing legal documents that name a guardian for your child, again if you are unable to care for your child or in the event of your death.

Once your child is an adult and has the legal capacity to sign documents, that child should have their own set of advance directives naming a trusted agent.

There are several types of special needs trusts. A First Party Special Needs Trust receives its funding from the special needs person as long as they are under 65. The funding mechanisms may be lawsuit proceeds, inheritance, or lump sum disability benefits. This trust can be established by the special needs child, parent, grandparent, or guardian and, when drafted properly, will not affect eligibility for the special needs person’s government benefits.

A Third-Party Special Needs Trust permits family members to use their assets to fund a trust to benefit a person with special needs without negatively impacting that person’s eligibility for government benefits. The funds in this trust type do not have a payback provision, allowing any remaining assets to pass to other beneficiaries as designated by the trustmaker and can be created during a lifetime or under the instructions of a will.

Finally, a Pooled Trust is a community trust that a non-profit organization manages to fund the needs of many special needs beneficiaries. In essence, the non-profit acts as a trustee and can be a good option for small families or those who seek non-family member trustees. The property held by a pooled trust for the beneficiary should not affect eligibility for government benefits.

If you have a life insurance policy or are considering one, you can make the proceeds payable to your third-party special needs trust. Leaving permanent and term life insurance policies to this trust type will not affect the child’s government benefits. If you have retirement accounts, those may be payable to the third-party special needs trust as well if there is a balance at the end of the account holder’s life.

It is not advisable to leave property for the care of your special needs child to a third party, such as another child. This third-party designate has no legal obligation to follow your wishes, leaving the use of your money to the discretion of that third party. As this type of arrangement is not legally enforceable, your child with special needs will be wholly unprotected after you die.

Create an Achieving a Better Life Experience or ABLE account. This type of account is not unlike the idea of the 529 College Savings Plan. An individual experiencing their disability before 26 years old can deposit up to $15,000 per year into their ABLE account. The account grows tax-free and can pay qualified expenses to maintain or improve quality of life. An ABLE account can also receive funds from parents, other family members, or friends who want to contribute to the account. Most government benefit programs are not affected by ABLE account funds.

There are many intricacies to consider when creating an estate plan that involves a special needs child. We help clients with their estate planning needs and would be happy to meet with you at your convenience to discuss your situation and determine the best plan for you and your family. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.