Special Needs Planning

Special needs planning can be done in a variety of contexts. For instance, when you have a special needs child, not only do you worry about how they will be cared for from a health perspective, but you also worry about how to provide for them after you are gone. Whereas most parents can leave their assets outright to their adult children, parents of a special needs child need to be more careful and give more consideration to how they will leave their assets. Advance planning by parents can make all the difference in the life of the child with special needs, as well as for siblings who may be left with caretaking responsibilities. You may be thinking of leaving the person a lump sum gift, however, that gift could render your loved one ineligible for government benefits they are otherwise be entitled to benefits like SSI or Medicaid.

Special needs trusts (also known as “supplemental needs” trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements, or other funds and yet not lose his or her eligibility for certain government programs. In addition to planning for a disabled child, special needs trusts can also protect a spouse who is receiving, or likely to receive, Medicaid benefits for nursing home care from being disqualified for benefits. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary when determining eligibility for public benefits, such as nursing home care.

In the case of a spouse, Florida law states that your spouse must receive 30% of your “augmented estate” whether or not the assets are probated. In other words, you cannot entirely disinherit your spouse – they are entitled, by law, to an “elective share” of 30%. If you predecease your spouse, their inheritance may result in them being dropped from the Medicaid program until the inheritance is completely exhausted. By doing proper estate planning for a disabled spouse, you can set up a special needs trust to ensure that benefits are not interrupted. You may also include provisions in the trust so that when your spouse dies, any remaining trust assets pass to the beneficiaries.

A Special Needs Trust, whether it is for a disabled child or a disabled spouse, can be used for a variety of life-enhancing expenditures without compromising your loved ones’ eligibility such as:

• Annual check-ups at an independent medical facility
• Attendance of religious services
• Supplemental education and tutoring
• Out-of-pocket medical and dental expenses
• Transportation (including purchase of a vehicle)
• Maintenance of vehicles
• Purchase materials for a hobby or recreation activity
• Funds for trips or vacations
• Funds for entertainment such as movies, shows, or ballgames.
• Purchase of goods and services that add pleasure and quality to life: computers, videos, furniture, or electronics.
• Athletic training or competitions
• Special dietary needs
• Personal care attendant or escort