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Estate Planning – Caring for Loved Ones with Special Needs: Part 3

In discussing Special Needs Trusts, it is important to remember that their purpose is to improve the quality of disabled people’s lives beyond the basic assistance provided by government programs.  If the funds set aside in such a trust are used incorrectly, the disabled person may lose his or her government assistance.  Most people with special needs are limited in their income earning power and they do not have enough other assets to cover all their financial needs. Government assistance is critical for their ongoing well-being.  A thorough understanding of eligibility requirements and the benefits provided by the various government assistance programs is key to ensuring that special needs trusts do no harm and that they serve the purpose for which they were intended.

While not a comprehensive list of all available government assistance programs, the following is a brief summary of the four main programs.  Although these programs are available to both individuals with and without disabilities, our discussion focuses on individuals with special needs.  As noted above, a thorough understanding of the available programs, their various eligibility requirements, and what they provide is critical when establishing special needs trusts.  For most people, the best way to gather and understand this information is with the help of an estate planning attorney experienced in this field.

Four Key Programs

1. Supplemental Security Income (SSI) – This program provides income to disabled people with “low income and few assets.”  “Financial means testing” is a key eligibility requirement   Because SSI eligibility rules set the standard for many other government assistance programs, these rules play a major role in special needs trust planning and administration.

2.  Social Security Disability Insurance (SSDI) – This program provides income to individuals with a sufficient work history prior to becoming disabled or to disabled persons who are dependents or survivors of disabled, retired, or deceased insured workers.  SSDI eligibility is not based on an individual’s financial situation.

3. Medicare – This government health care program is available to individuals aged 65 and over who are also eligible for Social Security (whether or not they are already receiving Social Security).  It is also available to disabled people under 65 who have been receiving SSDI for at least two years.   As with SSDI, Medicare benefits are not based on a person’s financial situation.

4. Medicaid – This government health care program is available to certain categories of individuals, including children, the blind, and the disabled, who meet certain financial eligibility requirements; it is not dependent on a person’s age.   As with SSI,  Medicaid eligibility involves financial means testing, and Medicaid rules are a central focus of special needs trust planning and administration.

Please note, special needs individuals may be eligible for one or more of the above-noted programs.  So, when considering a special needs trust for yourself or a loved one, be sure to fully explore all the issues surrounding these programs.

Part 4 in our series will discuss responsibilities of the “Trustee,” the individual who manages the trust assets and handles the administrative duties.

Getting Legal Help

Experienced Estate Planning Attorney, Elga Goodman, can help you navigate through the very complicated issues involved in establishing and administering special needs trusts.  Contact us today at 973-841-5111.

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