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O’Connell & Aronowitz Attorneys at Law
Trusts, Estates, and Elder Law Update Second Quarter 2013
Pictured above are the attorneys of our Trusts, Estates, and Elder Law Department, left to right: Matthew J. Dorsey, Esq. William A. Favreau, Esq. Heidi Dennis, Esq. Fred B. Wander, Esq. Jami Durante Rogowski, Esq. Not pictured: Brittnay M. McMahon, Esq.
In This Issue: • Planning for the Financial Future of Your Special Needs Child • Making Sure Your Bank Accounts are Properly Titled • What To Do When Your Spouse Applies For Medicaid • Meet Stephen R. Coffey, Esq. • Ask the Lawyer: How Do I Provide For My Final Wishes? • O&A Events • General Information about O’Connell & Aronowitz
Planning for the Financial Future of Your Special Needs Child Should a Trust be Part of Your Plan?
When you are the parent of a disabled child, you understand that providing for their financial needs presents unique challenges. When considering your own estate plan, it is very important to address how your child’s financial needs are going to be met after you are no longer around to care for them. A third party supplemental needs trust (SNT) can be established to care for your disabled child after you pass away. The SNT is designed to supplement, not replace, the governmental benefits that your child may be entitled to, such as Medicaid and Supplemental Security Income (SSI). When properly drafted, the assets within the SNT can not be considered when evaluating your child’s eligibility for Medicaid and SSI. The trust funds may be used to pay for goods or services that your disabled child might not otherwise receive through government assistance. Another advantage of a third party SNT is that you can provide that any funds left in the trust after your child dies may be left to other beneficiaries, such as your other children, grandchildren, or perhaps a charity. If you anticipate applying for Medicaid yourself to pay for your own nursing home care and you have a disabled child, you may want to consider alternatives to the third party SNT. The alternatives include the sole benefit trust and the pooled trust. Like the third party SNT, both of these alternatives will not affect the eligibility of Saratoga Office: 1 Court Street Saratoga Springs, NY 12866 518.584.5205 Fax: 518.584.5441
your disabled child for Medicaid and SSI. The advantage of transferring your funds to a sole benefit trust or pooled trust is that the transfer will not subject you to a Medicaid transfer penalty, which would negatively affect your own eligibility for Medicaid to pay for your nursing home costs. By contrast, the transfer of funds to a third party SNT may result in a Medicaid transfer penalty against your own Medicaid eligibility. After your disabled child dies, the funds left in a sole benefit trust must be paid to his or her estate, where they may be subject to a lien filed by the government for the cost of Medicaid paid on your child’s behalf during his or her lifetime. Pooled trusts are administered by nonprofit charitable organizations, such as the New York State Association for Retarded Children (NYSARC). The funds left in a pooled trust after the death of your disabled child can be used to pay the state back for the costs of Medicaid provided to your child or the funds can be used to benefit other disabled persons served by the charity that administers the trust. If you would like to discuss a third party SNT, sole benefit trust, or pooled trust for your disabled child, please contact the estate planning attorneys at the O’Connell and Aronowitz office near you.
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