Helping Families With Special Needs Estate Planning & More
Special needs planning is important in family care, particularly for families with a special child. Our dedicated service revolves around assisting families in drafting proper estate planning documents tailored to the unique needs of their loved ones with disabilities.
Establishing Special Needs Trusts
Central to this process is the establishment of special needs trusts, also known as supplemental needs trusts, which safeguard the eligibility of the individual for specific public benefits following the passing of a parent.
Preserving Eligibility
Moreover, Holly Lynch Law LLC recognizes the significance of maintaining eligibility for means-tested public benefits in scenarios such as inheritance, personal injury settlements, or jury awards. Through thorough consultation, Holly guides families in exploring various options, including specialized trusts, to prevent any reduction or loss of essential public benefits.
Special Needs Trust (SNT)
A “special needs trust” (also referred to as a “supplemental needs trust”) is a legal tool used by families to ensure their child has enough financial resources to meet his or her future needs without jeopardizing his or her eligibility for state or government aid. If your child already receives benefits from Social Security or Medicaid, you know they are very limited and cannot possibly cover all the expenses necessary to enjoy the quality of life you desire for your son or daughter.
Considerations for Parents
For that reason, many well-meaning parents will choose to leave their disabled child a large portion of their estate in a will without realizing their child could lose their benefits as a result (which, in the case of Medicaid, maybe the only health care option available to your child).
Benefits of a Special Needs Trust
Instead, parents of special needs children should consider establishing a special needs trust that will “hold” such assets for your child without actually putting them in his or her name. The assets in the trust will then be administered by a trustee of your choosing according to the rules you outline in your estate plan. By doing this, your child can continue receiving necessary government resources while still inheriting from you. The trust money would then be used to enhance your child’s life. Upon the individual's death, the remainder can go to the beneficiary of your choice, such as another child or grandchild.
Payback Trust Option
If an individual does inherit money outright, then he or she can still create what is called a “payback” trust. This trust will still allow the individual to retain his or her public benefits, but the difference is that upon the individual's death, the state will be “paid back” from the trust remainder.
ABLE Accounts
Understanding ABLE Accounts
ABLE accounts are a great tool for disabled individuals who do not have substantial assets and do not wish to create a trust and pay a trustee to manage funds.
Contribution and Usage
Contributions are limited to $18,000 per year from any source. The maximum lifetime amount the fund can have is $500,000 in Massachusetts and approximately $585,000 in New Hampshire. The individual and relatives may contribute. The individual may then use the funds for any purpose, as long as it relates to the disability. None of the funds will affect the individual's Medicaid eligibility (meaning they are non-countable). This is a great way to pull excess SSI funds or income so that the individual's asset limit stays below $2,000.
Eligibility Requirements
To qualify, the individual must have been disabled before the age of 26.
Contact Holly Lynch Law LLC today for personalized guidance and support. Let's ensure a brighter tomorrow for your family.