Holistic Special Needs Planning

Proper estate planning to help assure quality of life and quality of care for children or other loved ones with disabilities can be challenging. Holistic special needs planning uses state and federal trust laws to protect the assets of a person with disabilities. Such planning can be used to effectively coordinate your loved one’s care needs and to enhance your loved one’s life – making the most efficient use of all available resources. When special needs trust planning is needed it is an essential part of a properly designed overall estate plan. Ideally, such planning will provide a continuum of care and quality of life for the person with special needs even after loved ones are no longer able to do so themselves.

The Care Plan Provides for a Continuum of Care

The provision for care planning is one extremely important aspect of a thorough special needs plan. A person with disabilities may be fortunate to have some degree of family support and advocacy for some period of time. A well designed special needs plan will include guidance for how to continue to provide needed advocacy even after the primary caregiver(s) is no longer able to do so. This level of planning is best included as part of the special needs trust itself, empowering and giving appropriate direction to the Trustee. Similarly, the care plan may also include identification of preferred service providers, the inclusion of a care advocacy panel, and letters of instruction. Care advocacy planning as part of the overall special needs plan helps to best assure that your loved one will continue to receive the quality of care he or she deserves and provides you with increased peace of mind.

Preserving Access to Valuable Government Benefits

There are various government benefits programs available to help provide for the needs of persons with disabilities. Eligibility for many of these benefits is based on the person’s economic need. Having even a very small amount of countable assets (over $2,000.00) will generally cause disqualification. Valuable services paid by government benefits can include assistance with the cost of housing; medical and prescription drug cost; transportation services; education and training; mental health counseling; sheltered employment; case management; socialization activities; and aid and attendant services. Paying privately for these critical services will rapidly deplete savings, inheritance and/or lawsuit settlements. Proper special needs trust planning can help preserve access to these and other benefits while protecting resources that can be used to further enhance your loved one’s quality of life.

Special Needs Estate Planning

Special needs planning for persons with disabilities is most often done using a Special Needs Trust (SNT). Sometimes these trusts are called discretionary trusts or amenities trusts. These names can be used interchangeably.

There are two different types of (SNT’s):
1) SNT created to protect future inheritances; and
2) SNT to protect the available assets of a person with disabilities.

The SNT used to protect future inheritances is known as a “Third Party” SNT. A Third Party SNT is the type that is most often created as part of the parent’s (or other family member’s) overall estate plan. By contrast, the SNT used to protect the currently available assets (savings, lawsuit settlements, unprotected inheritances) of a person with disabilities is commonly referred to as a “First Party” or “Medicaid Pay-back” SNT. The First Party SNT is funded with those assets that need protection. Either of these types of SNT’s can be set-up as part of a “Pooled Account” usually managed by a charity.

How Much is Enough?

When creating the special needs trust we are frequently asked how to determine how much should be put into the trust to meet the beneficiary’s needs. To some extent the answer to this question depends on your financial ability to create a special needs trust fund. Working together with a professional financial advisor with special needs financial planning experience is critical. The objective is to identify and segregate sufficient estate assets to adequately fund the trust. If available assets are insufficient, lack liquidity, or are encumbered by added tax burdens (i.e., retirement funds), then the purchase of life insurance is often a good supplemental source.

Determining how much is enough to fund the trust also depends on the current and future needs of the person with disabilities. When planning for young children this is an even harder question to answer since we often have no way to predict what the child’s needs will be. Similarly, while parents planning for young children will always hope for the best, acting responsibly requires us to plan – just in case.

Coordinating SNT Planning to Benefit the Person with Disabilities
Frequently, persons with disabilities are legally capable of further protecting themselves and their legal rights through the use of Durable Powers of Attorney and the Designation of a Patient Advocate (Medical Power of Attorney) / Living Will. Using these legal planning tools will help reduce or even eliminate the need for Guardianship and / or Conservatorship. To be effective, the person with disabilities must be over 18 years of age and have sufficient capacity to execute these legal documents.

Our Holistic Special Needs planning process is designed to achieve the best results for each and every client and client family. Our offices are located at 30445 Northwestern Highway, Suite 250, Farmington Hills, Michigan 48334. If you have any questions regarding Special Needs Planning and Advocacy, we can be reached at (248) 538-1800.

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