PLANNING FOR THE
CARE OF YOUR SPECIAL NEEDS LOVED ONE Care Must Be Taken Within Your Estate Plan to Ensure that You Do Not Inadvertently Disqualify Your Loved One for Benefits After Your Death
LAW OFFICES OF BARTON P. LEVINE
If you are the parent or grandparent of a special needs child you are undoubtedly aware of the financial challenges that accompany caring for someone with special needs. Fortunately, there are a number of state and federal benefit programs that can help defer the cost of caring for someone with special needs; however, the eligibility rules, application procedures, and continued eligibility guidelines can be frustrating if not downright prohibitive. Despite this, it is crucial that you understand the rules, procedures, and guidelines to ensure that your loved one will receive all of the benefits and assistance to which he or she is
One of the main concerns parents and guardians of special needs children often have is determining how to provide for the financial needs of the child without affecting his or her eligibility for Federal assistance programs.
entitled. Care must also be taken within your estate plan to ensure that you do not inadvertently disqualify your loved one for benefits after your death.
WHAT BENEFITS ARE AVAILABLE TO SPECIAL NEEDS INDIVIDUALS? The good news for those who are concerned about the care and quality of life of a special needs loved one is that there are a variety of assistance programs for special needs individuals that are available in the United States. Although each program has its own set of eligibility criteria most require an applicant to pass a means test, meaning that the applicant's income and resources will be considered when determining eligibility. A
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brief look at some of the more well-known assistance programs may give you an idea of what benefits your special needs loved one may qualify for now or in the future.
ENTITLEMENT PROGRAMS Social Security Disability, or SSDI, and Medicare are both entitlement programs. What this means is that, unlike many other assistance programs, an applicant does not need to be considered low income to qualify. Because a recipient’s income does not factor into his or her eligibility for benefits under these programs it is not necessary to focus on them when doing estate planning.  Social Security Disability and Medicare -- SSDI provides recipients with a monthly check. The amount a recipient receives each month will depend on a variety of factors such as the earnings history upon which the benefits are based. Medicare is a federal program that provides health care benefits to eligible recipients. There is more than one path that your special needs loved one may take toward eligibility for the SSDI program. In most situations, a special needs individual will qualify under the Childhood Disability Benefits Program or the Disabled Adult Child Program. To qualify for the Disabled Adult Child Program the
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applicant must have become disabled prior to reaching the age of 22 and the applicant’s parent must either be receiving Social Security retirement or disability benefits or be deceased and have worked long enough to qualify for Social Security benefits. The disabled adult then receives benefits based on the earnings record of the parent. Moreover, after two years of receiving SSDI benefits the recipient will also be eligible for Medicare benefits regardless of his or her age.
MEANS TEST PROGRAMS Many of the programs that provide assistance to special needs individuals are means tested programs. This means that the applicant’s income and/or household income will be considered when determining eligibility. Typically, this also means that the applicant's and/or the family's resources will also be considered. Although resource limits will vary by program and by state it is not uncommon to see resource limits as low as $2,000. Some of the common means test programs include Supplemental Security Income, or SSI, Medicaid, In-Home Supportive Services, Temporary Aid to Needy Families, or TANF, Supplemental Nutritional Assistance Program, or SNAP, and subsidized or Section 8 housing. Medicaid – Medicaid is a jointly funded program between the federal and state governments; however, the individual states administer the Medicaid program. For this reason there are some differences with regard to eligibility guidelines and benefits among the states. In the State of New York as of 2013 a family of four
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could not earn more than $1,528 a month to qualify for Medicaid. The resource limit for a family of four with a disabled individual in the family is $27,495. Supplemental Security Income – Supplemental Security Income, or SSI, is a federally funded and administered program that provides a monthly monetary benefit to eligible recipients. In 2013 the maximum benefit for an individual in New York was $797. Both income and resources will impact eligibility and benefit amounts. For example, your special needs loved one may work and still receive SSI benefits; however, the income earned will reduce the amount of SSI benefits. If your loved one earns too much or the value of his resources exceeds the limit then SSI benefits will stop. For any of the means test benefit programs the recipient's income and resources are important. In addition, aid received by the recipient that is used to pay for shelter and food can also reduce the recipient’s benefit amount. Known as "In-Kind Support and Maintenance" the calculations relating to this type of aid are complicated; however, the important thing to understand is that if your special needs loved one receives this type of aid it will affect benefit eligibility.
ESTATE PLANNING CONSIDERATIONS Although all of these benefit programs are available to help defray the cost of caring for your special needs loved one you may wish to supplement these benefits. While you are alive it is much easier to work around the
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benefit guidelines to ensure that any assistance you provide does not disqualify your loved one from future benefits. Providing for continued assistance after your death, however, is a bit more complicated. With careful estate planning it can be done. Essentially, there are three ways that you can handle a special needs loved one in your estate plan. They are: 1. Disinheriting Your Loved One -- You can simply disinherit your special needs child. Doing this will ensure that your child does not lose any government assistance; however, if your child is able to comprehend that he or she has been disinherited it could be emotionally traumatic. Furthermore, this method does not provide for any supplemental care above and beyond the care provided by governmental assistance programs.
2. Leave Everything to Your Healthy Children -- You can also leave the portion of your estate intended for your special needs child to your other children with the understanding that your other children would use those assets to provide supplemental assistance to their special needs sibling. One problem with this strategy is that the assets left to your healthy children will be subject to seizure by creditors or spouses in a divorce. Furthermore, although most parents to not want to consider this possibility the reality is that once you leave assets to your healthy children they are under no legal obligation to use those assets for the purpose that you intended.
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3. Create a Supplemental Needs Trust - The third option, and the one that offers the most security for both you and your special needs child, is to create a Supplemental Needs Trust. A Supplemental Needs Trust operates in much the same way that any other trust does. You will need to appoint a trustee and name your special needs child as the beneficiary of the trust. Funds transferred into the trust can then be used to supplement your child's care. Moreover, benefits paid by the Medicaid program cannot be recovered from the trust upon the death of your special needs loved one and assets held by the trust are not subject to creditor claims. Finally, you have the added security of knowing that the assets held by the trust are being professionally managed if you pick the right trustee. Although estate planning is important for everyone it takes on a heightened importance when you are the parent or loved one of a special needs child. Without proper planning and careful consideration a wellmeaning gift to a special needs individual can result in the individual losing his or her eligibility for much-needed government assistance. The good news, however, is that by working carefully with your estate planning attorney you can ensure that your special needs loved one is properly cared for long after you are gone without jeopardizing your loved ones benefits. New York State Department of Health, Medicaid in New York Social Security Administration, Benefits for Children with Disabilities
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About the Author Barton P Levine For more than 30 years, Bart Levine has been the principal member of the Law Offices of Barton P. Levine. Mr. Levine specializes in estate planning, probate and estate administration, bankruptcy representation, special needs planning, medicaid planning, guardianship representation, elder law representations and real estate representation. Mr. Levine presents free educational seminars to the public throughout the greater New York City metropolitan area. These seminars are intended to educate the public about the importance of proper estate planning. Seminar topics include Basic Estate Planning, Asset Protection, Special Needs Planning, Medicaid Planning, Estate Planning for the GLBT Community, IRA Planning and many others. Mr. Levine also presents continuing education courses to the professional community. Experience Mr. Levine has been a member of the New York Bar since 1973. Mr. Levine is also admitted to practice law before the federal courts of the Southern and Eastern Districts of New York. Mr. Levine is a member of the American Academy of Estate Planning Attorneys (AAEPA) and the New York State Bar Association, Trusts & Estates Division. Law Offices of Barton P. Levine Main Office: 260 Madison Avenue, 17th Floor New York, NY 10016 Toll Free: (888) 268-4425 Fax: (212) 268-6267 Email: blevine@bartonlevine.com Website: www.bartonlevine.com
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