For families with a child with special needs, planning for the future is a must. It takes substantial time, money and planning to provide the necessary care your child with special needs requires on a daily basis. So, of course, you would need to have a plan in place for the future, in case you are no longer able to manage your child’s care yourself. Providing for their continued medical and personal needs, while being careful not to jeopardize their government benefits are important concerns. Special needs planning is designed just for this purpose.
Children with “special needs” basically require assistance because of medical, emotional or learning difficulties of some kind. In turn, the services that children with special needs require are meant to increase their quality of life. There are several options available which can be personalized to meet the specific needs of each child.
Possibly the most important reason to have a special needs plan in place as soon as possible is to ensure that your child will be cared for when you are no longer able to provide that care. Just as a parent needs to decide on a guardian for minor children, in case of their death, parents of children with special needs must plan of the possibility that they are no longer able to provide the necessary care. Because your child with special needs will certainly need special care, a plan is required.
Parents and families of children with special needs must be prepared for the long-term care that will be required. With the incredible advances in medicine and technology, children with special needs live longer, so parents must be prepared for the long-term expense. That is not the only reason you need to plan ahead. While caring for their children, parents still have to plan for themselves, including retirement and their possible need for long-term care.
A Special Needs Trust is the principal component of every special needs plan. The financial resources necessary to continue proper care for your child can be placed in a Special Needs Trust where they remain safe from lawsuits and creditors. A Special Needs Trust also guarantees that the funds you have set aside will not be considered financial assets that would affect your child's eligibility for government benefits. For example, a Medicaid applicant cannot have more than $2,000 in assets in order to qualify for benefits. The assets transferred to a Special Needs Trust are not counted by Medicaid.
There are basically two types of Special Needs Trusts. A General Support Special Needs Trust is typically used as the primary source of benefits for a child with special needs. The second type, the Supplemental Care Special Needs Trust, is used as a secondary source when government benefits have been exhausted.
When you are trying to decide which type of Special Needs Trust would benefit your child the most, there are two things you should consider: (1) to whom the money belongs and (2) whether those assets will cover the full cost of care and support for your child. If there is a possibility that the assets will be sufficient, then a General Support Special Needs Trust will probably be the best choice. But, if need-based government programs like Medicaid and Supplement Security Income (SSI), will likely be the primary resource for your child's care, then a Supplemental Care Special Needs Trust may be a better choice.
Most children with special needs are entitled to government benefits such as Medicaid and SSI. Both of these programs are "needs-based" which means that recipients must qualify financially in order to receive benefits. In order to create a proper plan, you must first understand how these programs work. In order to ensure that the transition between the parents and the successor caregivers is seamless, the special needs plan must address the preservation of your child's benefits.
In some cases, the benefits your child receives may not sufficiently cover all of the expenses associated with his care. In those cases, it is necessary to consider supplemental sources of income and support. One option is to take out a life insurance policy, which can provide those additional resources for your special child.
If you have questions regarding special needs planning or any other estate planning matters, please contact the experienced attorneys at Gaughan & Connealy for a consultation. You can contact us either online or by calling us at (913) 262-2000. We are here to help!