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Presented By Donald D. Vanarelli, Esq. Certified Elder Law Attorney Charter Member, Academy of Special Needs Planners 2007-2008 NJ “Super Lawyer” . Planning for a Loved One With Special Needs. What Does Planning Involve? . Preserving your child’s financial security and quality of life

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planning for a loved one with special needs

Presented By

Donald D. Vanarelli, Esq. Certified Elder Law Attorney

Charter Member, Academy of Special Needs Planners

2007-2008 NJ “Super Lawyer”

Planning for a Loved One With Special Needs
what does planning involve
What Does Planning Involve?

Preserving your child’s financial security and quality of life

Addressing key issues:

Understanding the role of public benefits

Making decisions about the future

Using estate planning/trusts to protect assets

public benefits at a glance
Public Benefits at a Glance

Financial Benefits

Supplemental Security Income (SSI)

  • Means tested: Limited income and assets

Social Security (SS)

&

Social Security Disability Insurance (SSDI)

  • Not means tested but subject to work credits or parents’ eligibility
public benefits at a glance1
Public Benefits at a Glance

Medical Benefits

Medicaid

  • Automatic with SSI
  • Must apply for SS/SSDI

Medicare

  • After two years of SSDI
supplemental security income ssi
Supplemental Security Income (SSI)

Must meet SSA’s definition of “disability” and have limited assets/income

Provides monthly income for food/shelter

Gateway to Medicaid / in-home support services

social security ss social security disability insurance ssdi
Social Security (SS) / Social Security Disability Insurance (SSDI)

Social Security for individuals:

Disabled before age 22 and

With parents eligible based on their work record who are retired, disabled or deceased

SSDI for individuals with work record

Social Security benefits may reduce or eliminate SSI benefits

medical assistance support
Medical Assistance & Support

Medicaid:

SSI recipients receive automatically

Covers “medically necessary” services, equipment, hospitalization

In-home services needed to live at home: personal care, housekeeping, cooking, transportation to doctors

Medicare:

Medical coverage, including doctors, hospital, skilled care

how benefits work together
How Benefits Work Together

SSI

Medicaid

SSDI

Medicare

case study nathan
Case Study: Nathan

Current situation:

18-year-old with autism

Lives with mom

Income from work programs, SSI, Social Security (from dad who is deceased)

Limited personal assets (clothing, tv)

Qualifies for Medicaid

case study nathan1
Case Study: Nathan

Future situation:

Who will make health care decisions?

Who will make financial decisions?

Where will he live?

How will his medical expenses be paid?

what plan could nathan s mom make
What Plan Could Nathan’s Mom Make?

Possible Options:

Make no decisions/plans

Leave money to Nathan

Disinherit Nathan

Leave money to a future caregiver

Establish third-party SNT for Nathan

Establish first-party SNT for Nathan

what steps should you take today step 1 envision your child s future
What Steps Should You Take Today? Step 1: Envision Your Child’s Future

Planning ahead makes a difference:

Where and with whom will your child live?

What type/level of care will be required?

Will a guardian/conservator be necessary?

Who else will be involved?

What kind of lifestyle is desired?

What unforeseen challenges could arise?

slide16
Lays out goals/expectations:

Details preferences, needs, wishes, both medical and personal

Lists key people in child’s life

Helps guide:

Family members

Trustees

Caregivers

Others

What Steps Should You Take Today? Step 2: Create a Memorandum of Intent

slide17
Monthly income:

SSI, SSDI, Social Security, earned/unearned income

Monthly living expenses:

Housing, food, transportation, medical, recreation, etc.

Consider how any shortfall will be met

What Steps Should You Take Today? Step 3: Estimate Income & Expenses

Income - Expenses = Shortfall

slide18
Provides supplemental funds for living expenses not covered by other income sources

May be established by parents:

Through will

Through living trust

“Living” SNT lets others contribute

Trustee has discretion over distributions

What Steps Should You Take Today? Step 4: Utilize a Third-Party SNT

the snt trustee responsibilities
The SNT Trustee Responsibilities

What are the trustee’s responsibilities?

Invests/manages assets

Distributes funds

Keeps books

Files tax returns

Hires advocates and care managers, etc., as needed

selecting an snt trustee
Selecting an SNT Trustee

Who should be the trustee?

Parent with professional co-trustee

Corporate or other professional trustee

Successor trustee

what parents should do
What Parents Should Do

Create Memorandum of Intent

Calculate future financial need

Establish SNT through will or living trust

Fund SNT with life insurance

Name SNT as beneficiary of accounts, plans, etc.

Reduce taxable estate

what your child should do
What Your Child Should Do

Sign Advance Directives, if legal capacity

Have a legal guardian appointed:

When child without mental capacity becomes an adult and parents want to maintain legal responsibility

Court appoints legal guardian

what if your child has assets
What If Your Child Has Assets?

Establish a First-Party SNT:

Provides funds for living expenses not covered by other income sources

Maintains eligibility for public benefits

Must be established by parent, grandparent, legal guardian or the court

State must be reimbursed from the trust for all Medicaid expenses

get started today
Get Started Today
  • Understand your child’s eligibility for public benefits.
  • Make plans for the future to maximize public and private resources for your child’s benefit.
  • Make the SNT a key part of your estate plan.
  • Contact a special needs attorney for the assistance you need.

Donald D. Vanarelli, Esq. Certified Elder Law Attorney

Charter Member, Academy of Special Needs Planners

2007-2008 NJ “Super Lawyer”