Providing For Your Child with Special Needs Beyond Your Lifetime

If your child has special needs, they likely depend on you tremendously for support. Have you considered how to provide for your child with special needs when the time comes that you will no longer be here? Creating a plan now can bring peace of mind and ensure that your child is properly cared for in the long term. A New York special needs planning attorney can help you navigate the legal processes involved with estate and special needs planning for your child, ensuring that your child’s needs are met while safeguarding their assets and access to government benefits.

The Importance of Protecting Your Child

The necessity of planning for the future of children with special needs, particularly after you’re gone or unable to provide care, is an essential foundation for their long-term welfare. People with disabilities often face unique life challenges and may require continuous support and care throughout their lives. This level of care frequently surpasses the scope of what government programs like Medicaid and Supplemental Security Income (SSI) provide.

Government benefits are intended to cover the basic necessities, which may not encompass the full spectrum of your child’s needs. These extra needs can range from specialized medical care and therapies to educational and vocational support. Moreover, individuals with special needs might require adaptive equipment, such as customized transportation services and modifications to living spaces, all of which are not covered by governmental assistance.

In addition, if your child receives a large sum of money – through an inheritance, insurance settlement, lawsuit proceeds, or a lump sum payment from Social Security – they may become disqualified from Medicaid and other government benefits. A special needs plan tailored to your child’s situation can safeguard your child’s eligibility for benefits – allowing them to keep both their government benefits and the cash windfall. 

How Can You Help?

As a parent, navigating the path of special needs planning for your child can be complex. Understanding the available options is the first step toward providing them with a secure future. The most important elements of this planning include setting up special needs trusts, safeguarding eligibility for government benefits, and creating legal structures that protect your child’s interests. Consulting with a New York special needs planning attorney can help you identify the necessary steps to effectively plan for your child’s future.

What Is a Special Needs Trust?

Federal law provides that individuals with disabilities can keep funds in a special trust to provide supplemental care, without these funds affecting eligibility for government benefits. These types of trusts are called Special Needs Trusts (SNTs) or supplemental needs trusts. An SNT is managed by a trustee who dispenses funds for the beneficiary’s needs. Funds from an SNT can cover a limited range of expenses with the criteria being that the funds are used for items not paid for by government assistance. This can include the purchase of a home or vehicle, home modifications, transportation costs, education, computer equipment, entertainment and vacation expenses, and health care expenses that are not covered by Medicaid.

Which Special Needs Trust Is Right For Your Child?

Choosing the right special needs trust for your child depends on several factors. These include the origin of the trust’s funds, the specific needs and circumstances of your child, and the long-term objectives of the trust. Each type has unique features and benefits, and an experienced attorney can help you determine which is most appropriate for your situation.

1. First-Party Special Needs Trust: This type of trust is funded with assets that belong to the beneficiary, such as an inheritance, a personal injury settlement, or other funds the child directly receives. Also known as a self-settled special needs trust, these trusts are used in situations where the child with special needs receives assets that would otherwise disqualify them from eligibility for government benefits. A critical aspect of the first-party SNT is that upon the death of the beneficiary, any remaining funds in the trust must be used to reimburse the government for Medicaid benefits received by the beneficiary. This is known as a pay-back trust.
2. Third-Party Special Needs Trust: This type of trust is established and funded by someone other than the beneficiary, such as parents, grandparents, or other family members. Like a first-party SNT, the assets in this trust will not count toward eligibility for government benefits. The main advantage of a third-party SNT is that, upon the death of the beneficiary, any remaining assets in this trust can be passed on to other family members or beneficiaries, as specified by the trust’s terms, without any obligation to reimburse the government for Medicaid benefits provided.
3. Pooled Trusts: A pooled trust is managed by a non-profit organization who pools the resources of many beneficiaries for investment purposes while maintaining separate accounts for each beneficiary’s needs. A pooled trust can be a first-party SNT or a third-party SNT. These types of trusts can be a great option for families with more limited funds to place in the trust or families who need someone to act as a trustee.

Planning For the Unexpected

When planning for the future of a child with special needs, it is essential to consider the unexpected. This could be unexpected financial gains or unforeseen life events such as the untimely death or incapacitation of a parent. This preparation involves creating an estate and special needs plan that includes guardianship arrangements, detailed care plans, and financial planning such as establishing a Special Needs Trust for your child. This comprehensive approach to special needs planning ensures that your child is well-cared for in all eventualities, providing peace of mind and security for both you and your child.

Do You Have a Trusted New York Special Needs Planning Attorney? 

If you need to start planning for a child or other loved one with special needs, having a trusted estate and special needs planning attorney by your side makes all the difference. At Cona Elder Law, our New York special needs planning attorneys are dedicated to providing individually tailored services that meet your specific goals and needs. With decades of experience, our award-winning attorneys are here to advocate for you and your loved one to ensure their needs are met and their assets are protected – now and in the future. Contact us today to find out more.