When you have a beneficiary who is receiving government benefits, including benefits that pay for medical care such as Medicaid, reimbursement for expenses through SSI, or benefits for housing such as section 8, whether they are eligible for these benefits will depend both on their disability and on the assets they own. Therefore, any assets they receive from others either by gift or by inheritance can make them ineligible to receive these critical benefits. We have seen children who are receiving medical care paid for through governmental benefits become ineligible for these benefits and stop receiving the medical care they need. Proper planning is essential so that a family member can gift assets during life and/or after death to a child who is receiving governmental benefits without jeopardizing these vital benefits. One of the main tools used by families is to create a “special needs trust” which is designed to supplement but not replace any benefits that a child would be receiving from the government. In this blog we will explain two types of special needs trusts that are commonly used in estate planning. [Read more…]
Planning for a loved one who has special needs often involves unique circumstances and may require extra care. If you are their primary financial provider or caregiver, you will probably want to ensure that your loved one is getting the proper care and funding they need in the event that you are no longer able to provide it for them. There are a variety of techniques that can be incorporated into your estate plan to care for your loved one who has special needs. [Read more…]
Caring for a loved one with special needs can be a deeply rewarding journey, but it also comes with unique challenges and responsibilities. If you are their primary caregiver, it’s crucial to consider what will happen to your loved one if you are no longer able to provide care for them. While your dedication may be unwavering, it is essential to have a backup plan in place for their continued well-being. In this blog post, we’ll explore the various care options available to ensure a secure future for your loved one with special needs, such as considering their medical expenses and the need for additional caregivers. [Read more…]
We are in the first few weeks of the back-to-school season! Many students are starting to settle back into their school-year routines and are becoming accustomed to new rhythms and ways of doing things. For some, however, it may feel a bit harder to figure things out or to do things the way it seems they are expected to do them. As a parent, you may be starting to notice that your child is struggling in some way. If so, we want to make parents aware of accommodations and modifications that schools offer that may help their children with completing their schoolwork or make them more comfortable in an educational setting. [Read more…]
Estate planning has many benefits that help protect and care for your children. This is especially important when you have a child with a disability or special needs. Special needs planning is not only to set aside money to care for your child if something was to happen to the main provider, but also to set up care for them once they become adults.
Special needs trusts (SNTs) are a specific tool to be used in estate planning when parents have a child with physical, mental or developmental conditions that require persistent care and make it difficult for the child to support themselves. An SNT provides parents with a means to take care of their child after they are gone with the help of a trustee to manage the assets on their son or daughter’s behalf without jeopardizing any governmental benefits they are receiving now or may receive in the future.
If there is one overarching piece of advice across all estate planning, it’s ‘better sooner than later’ and this, too, applies to special needs trusts when they are applicable. But there are some timing considerations to keep in mind specifically with SNTs.
It’s one of the hardest things for any parent to think about, but for special needs families, planning for the child’s needs when the parents have passed, is particularly important. Trying to determine how much money the child will need while the parents are living and after they have died is complicated.
A recent Kiplinger’s article asks “How Much Should Go into Your Special Needs Trust?” As the article explains, a special needs trust, when properly established and managed, lets someone with a disability continue getting certain public benefits.
The benefits for income, health care, food and housing for disabled Americans are awarded based on a resource test, so that individuals who seek benefits are typically limited to have no more than $2,000 in savings or assets. This includes eligibility for Supplemental Security Income (SSI), SNAP and Medicaid.
In 2014, Congress passed legislation allowing people with disabilities to establish an account, similar to a special needs trust and with some similarities to a 529 college savings account, to accumulate funds to pay for qualified disability expenses. The legislation was named the Achieving a Better Life Experience Act (ABLE).
Okay, so you have heard about all the documentation you need to prepare for your special needs child, you understand about establishing a trust, and you opened a 529 to save for their education, but now college is approaching. This can be stressful because you are nervous about having them attend school and you might be a little unsure about how they will do at a higher education institution, but we have some tips/areas to address from The Hechinger Report on preparing for your special needs child heading to college.
Since higher education is not a right, there is extra work you will want to do as a parent of a special needs child. Your child will still be required to hand in assignments on time and the curriculum will not be changed to accommodate them. So, learning life skills (sometimes referred to as soft skills), procuring support for them while they are in college, and completing other documentation are all keys to your child succeeding in college!
For those with disabilities, having an ABLE account can be a very important aspect of financial planning. In the wake of the Tax Cuts and Jobs Act of 2017, ABLE accounts reaped several benefits according to an article from Credit Karma, “ABLE Accounts: How Tax Reform Improved Accounts to Pay for Disability Expenses”.
ABLE (Achieving a Better Life Experience) accounts allow taxpayers with disabilities, who are eligible, to open and add to tax-advantaged savings without their access to benefits being affected. To be eligible, your disability needs to have arose before you were 26 years old. ABLE accounts work similarly to 529 education savings plans, and anyone can contribute to another’s account, but there is a cap on the total balance of the account and on how much you can personally contribute. The tax advantage of the account is that you don’t have to pay taxes on the money the account earns as long as your withdrawals do not exceed the expense of your disability.