Michigan Special Needs Planning
Holistic Legal Help from Caring Attorneys
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Michigan Special Needs Planning
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Our loved ones with special needs fill our hearts like no one else. That’s why they deserve the best life possible, both now and into the future.
However, Michigan families are often overwhelmed by the process of special needs planning. Many are unsure of where to begin, what legal tools are available to help them, or how to safeguard government benefits.
Time and again, the special needs planning attorneys at Mall Malisow & Cooney have replaced confusion with clarity for Michigan families that have loved ones with a disability. Let us provide the insights and answers you need to make the right decisions for your family.
Families who care for a child or adult with a physical, cognitive, or developmental disability face planning concerns that are far more complex than traditional estate planning.
As a result, special needs planning often has to:
Clearly, planning in Michigan for special needs must account for a wide variety of factors, both small and large. For example, even a well-intentioned gift can unintentionally disqualify a beneficiary since public benefit eligibility is often determined by countable assets and income.
Thus, it’s essential to take a holistic approach to special needs planning that carefully accounts for all scenarios and uses the right legal tools to create the outcome you want for your family member with special needs.
With over a century of combined legal experience, the special needs planning lawyers at Mall Malisow & Cooney are ready to create a complete plan that cares for your loved one with a disability.
Our thorough understanding of both federal and Michigan law lets us help Michigan families like you find long-term solutions that ensure their loved one is cared for throughout their lives, preserving their dignity, financial security, and legal protections.
The cornerstone of most special needs planning is a special needs trust (SNT), also called a discretionary trust or amenities trusts.
A special needs trust is more than just a document, as it provides a protective and strategic structure for families who want to ensure lifetime care beyond their own involvement.
A properly drafted special needs trust allows an individual with special needs to benefit from trust assets without losing eligibility for government benefits.
Michigan recognizes both first-party and third-party special needs trusts.
First Party Special Needs Trusts
A First Party Special Needs Trust is funded with the individual with a disability’s own assets, such as lawsuit proceeds, savings, or inheritance.
Also called a Medicaid Payback Trust, it allows beneficiaries to use funds for care and quality of life expenses during their lifetime. However, it requires any funds remaining in the trust to repay the Medicaid agency at their death.
However, it’s essential to carefully word the terms of the trust to ensure the funds are not applied to needs already met through government assistance.
Third-Party Special Needs Trusts
These trusts are funded with assets belonging to someone other than the beneficiary, often from another family member’s assets.
If drafted correctly, they are not subject to Medicaid payback requirements, meaning they are not required to pay back the state for benefits paid to the beneficiary during his or her lifetime (unlike the First Party Special Needs Trust above).
With any special needs trust, a well-qualified trustee is needed to manage the funds in order to not compromise government benefits.
The Michigan Trust Code gives these trustees their legal authority, but also establishes fiduciary duties and oversight expectations.
These trustee responsibilities include:
Our special needs planning attorneys will help you create a Michigan special needs trust that helps ensure the long-term care of your disabled loved one while also fully complying with all laws and benefit requirements.
To complement a special needs trust, Michigan families may also use ABLE accounts as a supplemental, tax-friendly tool to care for their loved one with a disability.
Named after the Achieving a Better Life Experience (ABLE) Act of 2014, these savings accounts allow qualifying individuals with disabilities to save money without jeopardizing their eligibility for certain public benefits.
In Michigan, these accounts are known as MiABLE accounts. Funds from these accounts can be used for a wide range of expenses including education, independent living expenses, transportation, healthcare, and employment support.
Contributions can be made to these accounts by anyone using post-taxed money. Earnings on the account grow tax-free, and distributions for qualified expenses are also tax-free.
While these funds are not deductible on federal tax returns, Michigan tax guidelines allow taxpayers to deduct up to $5,000 for single filers and up to $10,000 for joint filers on their Michigan state tax return for their MiABLE contributions.
Recognizing their many benefits, MiABLE accounts can complement a special needs trust as an efficient way to directly pay for qualified disability expenses that do not require trustee involvement.
Let our special needs planning attorneys help your family understand the best way to take advantage of a MiABLE account and integrate it into a broader estate planning strategy.
Maintaining public benefits while also growing and protecting assets is often difficult for Michigan families of individuals with disabilities. Fortunately, pooled account trusts let you accomplish both of these goals.
A pooled account trust is established by a non-profit association for the benefit of a person with a disability. The non-profit organization pools, manages, and invests the funds and controls disbursements.
As a result, the financial assets of an individual with special needs within these accounts do not count towards benefits like Medicaid.
This allows the individual to use the funds on almost anything else not provided by government benefits, such as home modifications, education, clothing, pets, vacations, furnishings, and entertainment.
Pooled account trusts may also be useful when a court is involved, such as in a conservatorship or settlement situation.
Let our special needs planning attorneys assist in helping you understand if a Michigan pooled account trust is right for you, along with establishing it and ensuring its legal compliance.
A comprehensive Michigan special needs plan is rarely limited to a single trust. Instead, it often requires layered planning to achieve goals, provide continuity of care, and establish legal authority.
Parents or caregivers frequently need to ensure that the correct fiduciary arrangements are in place for both financial and medical decisions.
If the beneficiary is a minor, the planning must anticipate guardianship or conservatorship needs that may arise at age 18, when Michigan law recognizes legal adulthood regardless of functional ability.
In addition to the special needs trust itself, a complete plan may include:
Revocable Living Trust
Family members can create Revocable Living Trusts during their lifetime. Upon their death, the share for a beneficiary with a disability is distributed to the Third Party Special Needs Trust, and not directly to the beneficiary themselves. This ensures that the beneficiary retains all of their government benefits.
Durable Power of Attorney (DPOA)
Michigan law allows a trusted agent to be appointed to manage a disabled individual’s finances if their parent or guardian becomes incapacitated.
This step can be crucial for special needs planning, since an individual with special needs may not be able to manage their own finances after turning 18.
A DPOA allows a chosen person to have the authority to sign checks, pay bills, manage property, and handle other financial transactions to protect the individual’s financial well-being.
Medical Power of Attorney (MPOA)
This allows a trusted person to make health care decisions if the individual with special needs becomes unable to do so themselves. It also provides an alternative to potentially complex and costly guardianship proceedings.
Without these companion documents, a special needs trust may become difficult to administer.
Part of the role of our special needs planning attorneys is to use these and other tools to ensure that your plan’s structure is properly funded, implemented, and works in the real world.
Special needs planning requires not only drafting documents, but also a complete understanding of how government agencies evaluate resources.
After all, each benefit program has separate standards, and planning must account for federal, state, and sometimes county-level administration.
For example, eligibility for SSI and Medicaid depends on income and asset limits, and these programs apply strict technical rules to distributions from trusts, MiABLE accounts, and direct support arrangements.
Additionally, an asset distribution that appears harmless can be considered “countable income” by Michigan or the federal government if made incorrectly. Thus, a trustee who is unaware of these rules can unintentionally reduce or suspend government benefits.
Our special needs planning firm lawyers help Michigan families navigate the interaction between planning documents and government benefits. That includes advising on SSI resource and income rules, Medicaid eligibility criteria, and waiver-based services.
In some cases, families require help with administrative proceedings or agency reviews to clarify how trust assets should be characterized.
We also assist in structuring gifts and inheritances from third parties so that a well-meaning relative does not unintentionally disqualify the beneficiary.
Because this area of law is highly technical and consequences are often irreversible, thousands of Michigan families wisely choose our special needs planning attorneys to advise them before making any changes to resources, financial accounts, or estate transfers.
To provide a holistic approach to special needs planning, the attorneys at Mall Malisow & Cooney help ensure that long-term benefits protection complement practical needs, such as securing appropriate care, residential placements, and support services that promote the best quality of life possible.
After all, a family member with special needs can be highly dependent on government benefits such as Medicaid, since these often determine what residential or support services are available. If a beneficiary loses eligibility, their placement or service structure can be disrupted.
Thus, special needs trusts and MiABLE accounts are more than financial structures — they are also tools that preserve access to necessary care.
Knowing this, our attorneys utilize Michigan’s legal framework to effectively plan for placement stability by protecting the eligibility that makes these support settings available to your loved one.
Let our special needs planning attorneys help ensure the legal and financial foundation for that support is well established to ensure ongoing care and support for your loved one with a disability.
Special needs planning is one of the most technical areas of Michigan estate law. It sits at the intersection of trust law, public benefits law, federal disability regulations, and Michigan’s probate and guardianship system.
Thus, a simple drafting error that might be harmless in a typical trust can be catastrophic in a special needs trust: a wrong paragraph can turn a protected asset into a countable resource, or an unwise distribution can suspend Medicaid or SSI.
If your loved one with special needs depends on access to medical care, housing support, and basic income, it’s essential to choose legal help that gets everything right.
The special needs planning attorneys at Mall Malisow & Cooney have such a stellar reputation that we routinely receive referrals from other attorneys who encounter cases involving special needs planning that goes beyond standard estate work.
Let us provide the special needs planning help you need that’s in-depth, trustworthy, and tailored to the needs of your loved one.
Our attorneys at Mall Malisow & Cooney are ready to provide the legal guidance you need to safeguard a disabled loved one now and into the future. Our holistic approach to special needs planning will preserve benefits, grow resources, and protect continuity of care.
Get started today by calling us at 248-538-1800 or fill out our contact form.
