Embed Size (px)
DESCRIPTION
Citation preview
SPECIAL NEEDS PLANNINGA presentation for parents and caregivers of children and adults with special needs
SPECIAL NEEDS PLANNINGPrepared by Randy Hope Steen,
Esquire
The Law Office of Randy Hope Steen
403 S. Bonsall RoadCoatesville, PA 19320T [email protected]
What is Special Needs Planning?A discretionary trust created for a disabled
individual as a way to supplement the person’s public benefits. The trust specifically provides funds in addition to the child’s public benefits to enhance the quality of the child’s life
Public Benefits may include SSI, Medicaid, Section 8 Housing, and other federal or state sponsored assistance programs based on financial need
Potential Advantages of a Special Needs Trust
Protects assets
Maintain a home
Protects the disabled beneficiary
Covers additional services/therapies/equipment
A Special Needs Trust Can Help Pay For…
Personal attendantMedical goodsDental careSurgery or medical
procedures Private rehabilitation Psychological support
Home modificationsStamps and writing suppliesDrug and alcohol treatmentRecreational/cultural
experiencesAdditional therapies/activitiesEnrich quality of life
What are 2 Basic Requirements of Special Needs Trusts
Trustee has total control over the monies inside the Trust
The child/dependent can have no power, authority or control over the Trust
Who would be the Trustee?Depends on the
specific issues in the situation/estate
A trusted family member(s), friend(s), a corporate fiduciary, bank, trust company, or a combination of an individual, and corporate fiduciary serving together
What qualities are important in a Trustee?Good heart
Shared values
Financially savvy
Advocate
Resolved
Organized
A Trustee who will follow your wishes as outlined in your Letter of Intent
You do not have to have one person shoulder the responsibility alone.
WHAT ARE SPECIAL NEEDS PROVISIONS?
Specific legal trust provisions which state that the assets of the trust are to be used as a supplement to, and not a replacement for the needs based public benefits a beneficiary is receiving
Where do I put these Special Needs Provisions?
Last Will and Testament, or in a separate Special Needs Trust
3rd party Special Needs Trusts, are not considered an available resource for Medicaid, governed by 42 U.S.C Section 1396p(d)(3)(B)
Special Needs Trusts created by the disabled beneficiary, are treated as available assets for Medicaid payback, governed by 42 U.S.C. Section 1396p(d)(3)(A)
All issues in estate determine [email protected]
Who Prepares The Special Needs Trust Provisions?
Attorney who routinely prepares Special Needs documents
Placement of Special Needs provisions
Flexibility in document provisions
Is it expensive? This is critical
planning that should be considered!
Cost of preparing a Last Will and Testament, which you need anyway
Cost of a separate trust varies from attorney to attorney
Must be Attorney experienced in drafting Special Needs Language
Team Approach from your Advisors
How to determine how much is needed to fund a Special Needs Trust?Current cost of care
Future Costs/Life Expectancy
Benefits
Home
The unknown
Life Care Plan
How much is needed to fund a Special Needs Trust? What are the basic housing
costs?
Custodial care? Nursing services?
Personal Needs?
Transportation costs?
Clothing?
Job Coaching?
Entertainment?
Prescription Drugs? Over the counter drugs?
Meals?
Additional Education?
Tuition? Books?
Special Equipment?
Service Animals?
Therapies?
Where do I get the money to fund the Special Needs Trust?
Gift existing assets
Leveraging wealth
Examine Finances
Review all Parent’s and Grandparent’s assets
No funds outright from anyone
Check beneficiary designations
Choose the right assets for the trust
What are the pros and cons of funding the trust with assets I have?
Pro’sWealth exists
No funding costs
Con’sLose control of
assets
No money left
What are the pros and cons of purchasing life insurance?
Pro’s Leverage wealth Cost effective Generally Creditor
Protected Asset Gifts of premiums using
Annual Gift Tax Exclusion Income and Estate tax free
death benefit Tax deferred basis on
growth Estate equalizationCon’s Pay premiums
The importance of planning today
TAKE CARE OF IT NOW!
Life is unpredictable
Peace of Mind
Everyone needs a Will
Appointing Guardians
Quality of life
Enrichment of life
WHAT IF YOUR CHILD HAS ASSETS OF THEIR OWN?
Lawsuit proceeds, gifts, inheritances, etc.
Self-Settled Special Needs Trusts
Medicaid Payback
SPECIAL NEEDS POOLED TRUST ACCOUNTS
Established by a nonprofit charitable organization for the disabled beneficiaries regardless of age
Beneficiary can add their own assets
Beneficiary who is 65 or older must have a formal finding of disability under Social Security to qualify
Funds are pooled together
When used?
Medicaid payback
CHARITIES AND SPECIAL NEEDS PLANNING
Charitable Trusts and tax deductions
How it works
No Medicaid Payback
For the beneficiary’s lifetime
Leave a legacy
Leave a Legacy-Giving Back to Charity
Give back to charities
How gifts can be made
Life Insurance
Income and estate tax deductions
Scholarship Funds
Endowments
Other Things To Think About… Life Care Plan
Letter of Intent
Early Intervention, and the Intermediate Unit
IDEA-Individuals with Disabilities Education Act
IEP-Individualized Education program
Financial Planning
All financial goals
Getting the right attorney
Team Approach
What is a Life Care Plan? A plan for the special needs beneficiary’s life
Quality of life
Seizing opportunities and leveraging funds
System of accountability of trustees
Do not depend on other family members to take care of your child
Addresses savings goals
Life Care Planners and Special Needs Planning Attorney’s assist and guide you in preparing this
What is a Letter of Intent? NOT legally binding
Provides direction
Provides specific wishes
Details medical condition, history, medications, doctors, therapists, daily care needs and routines, social needs, emotional well being, housing, services, etc.
Snapshot of a day
Normally drafted with the assistance of Attorney and/or Life Care Planner
HELP…Early intervention 0-3yrsThe Intermediate Unit 3-5 yrs
IDEA-requires that all children 3-21 receive free appropriate public education, as close to home as possible. Supplemental services are to be provided to assist a child in completing their education. An assessment process to determine a child’s needs
IEP-a written statement about the child’s impairments, abilities and challenges that is required by the IDEA. Children are evaluated by the school district, yourself and educational professionals to determines your child’s special needs. This is an annual process
WHAT SHOULD I DO NEXT?Meet with Financial Professional. Do not wait until
you get organized to do this, a good financial professional will help you get organized
Retain an attorney experienced in drafting Special Needs documents
Team Approach
Do not put off getting your planning in order, none of us know what the future holds
If You Have Additional or Confidential Questions…
29
The Law Office of Randy Hope Steen403 S. Bonsall RoadCoatesville, PA 19320T 215.570.0047Fax [email protected]
