Special Needs Planning
 
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Special Needs Planning allows a person to enjoy the benefits of assets while still being eligible for government benefits






  
 
 
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Special Needs Planning protects assets so that  people with disabilities can qualify for government benefits while having the benefit of their assets

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Imagine working for decades to set aside assets for the protection and care of your special needs child.  Now imagine all that hard work going to waste because improper planning -- or lack of planning -- fails to preserve these assets to be available for that child.  This is the tragic outcome that Special Needs Planning seeks to avoid.
 
 
People with disabilities and special needs are the most vulnerable members of our society.  Special Needs Planning involves using sophisticated techniques to protect assets so that a person with disabilities or special needs can enjoy the benefits of these assets while still remaining eligible for government benefits.  This planning can be used to protect minor children as well as adults with special needs.
 
 
Examples of Special Needs Planning include:
 
  • Drafting Wills in such a way that assets can be left to a beneficiary with special needs in a trust (called a "Special Needs Trust", which is also referred to as a "Supplemental Needs Trust"); 

 

  • Setting up Trusts so that assets can be transferred during life (called Inter Vivos Trusts", which are also referred to as "Living Trusts") for the beneficiary;

 

  • Bringing a Court proceeding to amend a Will after a person's death to make it now include a Special Needs Trust that it did not previously have;

 

  • Setting up the form of ownership of assets to make sure assets end up being protected for the special needs beneficiary;

 

  • Bringing a Court proceeding to set up a Special Needs Trust either in anticipation of receiving assets, or even retroactively, after the fact (called "nunc pro tunc") if the special needs individual receives assets from an inheritance or lawsuit or from any other source;

 

  • Bringing a Guardianship proceeding so that someone is appointed to take care of the personal and property needs of a special needs individual, especially one that has recently reached adulthood -- parents are often surprised to find out that they must do this for their special needs children that have reached 18 years of age;

 

  • Assisting in making sure care and benefits are in place for the special needs individual through appropriate agencies, care managers, etc.
 
 
The reason such planning is so important is that most government programs are "needs-based", meaning that a person is eligible to receive such benefits only if his or her income and assets are below certain limits.  If they have more assets or more income than these limits, they cannot receive these benefits.  Therefore, without such planning in place, once the person with special needs receives assets -- whether from inheritance or as a result of a lawsuit or from another source -- he or she becomes immediately ineligible for the needs-based government benefits.  In fact, the person would have to spend down virtually all of the assets they just received, and again become impoverished, before they could once again receive the government benefits.  The assets they received would, in effect, just be wasted and lost to them.
 
 
The government has expressly authorized the Special Needs Trust (or Supplemental Needs Trust, also abbreviated as "SNT") as a kind of trust specifically intended to hold assets for the benefit of a disabled or special needs individual which provides that government benefits will be not be replaced or supplanted -- i.e., that the recipient may have both the benefit of the assets in the SNT, and the government benefits to which he or she would otherwise be entitled, as well.


In other words, special needs planning is designed to give the special needs individual the benefit of assets that are left to him or her, without jeopardizing the recipient's eligibility for SSI, Medicaid and other benefits.
 
 
For an article by Jim D. Sarlis on Special Needs Trusts, click HERE.   In our Definitions section, we explain commonly used terms.