Berge & Berge, LLP Blog

Tuesday, May 15, 2018

Five Things You Didn't Know About Special Needs Planning That Can Hurt You

Special needs planning involves making sure your family member’s daily needs are met, and he or she is safe even if you are unable to continue to provide care and support. Unfortunately, it is easy to make mistakes that can impact the quality of life and independence level of the person with special needs. If your loved one needs assistance managing the tasks of daily life, it is important that you consult with our California Special Needs Planning Lawyer to discuss options for future care for your loved one. In the meantime, check out these five things you may not know about special needs planning that could be major stumbling blocks to providing future care for your loved one.

Potential Mistakes in Special Needs Planning

1.Without careful planning, you could jeopardize government assistance

There are several federal and state government programs that can assist individuals with special needs. Examples of programs your loved one may qualify for include Medicaid, SNAP (Supplemental Nutrition Assistance Program), and SSI (Supplemental Security Income). However, if you do not carefully engage in special needs planning, your loved one could be disqualified for government benefits.

A Special Needs Trust is an irrevocable trust used to provide care for an individual with special needs. Assets within the trust are managed by a trustee and used for the future care of an individual with special needs. The trust assets are protected from creditors and do not count as assets for determining eligibility for government benefits. Therefore, a Special Needs Trust can be very useful in avoiding eligibility problems when applying for government benefits.

2.Choosing the Wrong Special Needs Trust Can Cause Loss of Government Benefits

You must carefully choose the type of trust to create based on your loved one’s needs and assets. If the trust will be the principal source of funds used to support an individual, you can create a General Support Special Needs Trust. However, if the individual will receive government benefits and use the trust assets only when the government benefits are depleted, a Supplemental Care Special Needs Trust is probably the best option. Working with a California special needs planning lawyer is essential to determine which type of trust is needed to ensure the future care of the individual even after you pass away.

3.Choosing a Successor Trustee

In most cases, the caregiver who establishes the trust names himself or herself as the trustee. However, the trust should name at least one if not more successor trustees who will manage the trust if the initial trustee resigns, becomes incapacitated, or dies. When choosing a successor trustee, you need to consider how well this person knows your loved one and whether the person has the time and skills to manage the trust. You should always consult with a person to ensure he or she is willing to serve as trustee before naming that person as a successor trustee.

4.Establishing a Self-Settled Trust Before Age 65

If the Special Needs Trust is funded with property owned by the individual with special needs, Medicaid requires that the trust reimburse Medicaid for benefits from the remaining trust assets when the person dies. However, if the individual is over 65 years of age, a Pooled Special Needs Trust is created.

A non-profit organization “pools” the assets of several beneficiaries into a trust for the benefit of those beneficiaries. When the person passes away, any remaining assets in the pooled trust are used to benefit other individuals with disabilities.

5.Ignoring Your Own Estate Plan Can Complicate Special Needs Planning

Even though you may be focused on providing for a loved one with disabilities, it is vital that you establish your estate plan in conjunction with special needs planning. Working with a skilled California Special Needs Planning Lawyer can help ensure that all legal requirements are met and that your estate plan does not conflict with any special needs planning.

We are here to help you with special needs planning for your loved one. Schedule a consult with the Law Offices of Berge & Berge today. Our lawyers can help you set up your estate and execute documents required to ensure your loved one’s needs are met in the future.

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