Special Needs Planning

Are you disabled and have assets, but believe you cannot access required care or services until you spend down those assets? Do you have a child or loved one with special needs who you want to provide for in your estate plan, but are afraid they will lose benefits if you include them in your plan?

With careful planning, you will have confidence and peace of mind knowing that you and they will be in good hands.

Putting a special needs plan in place is crucial to enhancing the quality of life of the special needs person while at the same time preserving assets. It ensures that someone with mental and/or physical disabilities will have the resources to obtain services, including Supplemental Security Income (SSI), Medicaid, and long-term care. This can be done through a variety of strategies, such as Special Needs Trusts, Pooled Trusts, Supplemental Needs Trusts, and ABLE accounts.

At Amoruso & Amoruso LLP, we take a holistic approach to estate planning. We take into account special needs planning to create one comprehensive, custom-made estate planning package.

Our attorneys have nearly 60 years of combined legal experience in estate planning, long-term care, asset protection, and special needs planning. We take the time to get to know your family dynamics, identify tailored solutions, and develop a comprehensive plan that meets your and your loved one’s future needs and goals.

We invite you to contact a New York special needs planning lawyer at our firm to learn more about the many avenues that could be suitable for your family.

What Does Special Needs Planning Entail?

Special needs planning involves making financial and legal arrangements for a disabled or blind individual or a friend or loved one with such special needs. It aims to ensure that a special needs individual has the resources to enhance their quality of life while maintaining eligibility for available public benefits such as:

  • Supplemental Security Income (SSI)
  • Medicare/Medicaid
  • Supplemental Nutrition Assistance Program (SNAP)
  • Housing assistance

Eligibility for many public benefits requires meeting certain income and asset thresholds. Special needs planning manages a special needs person’s assets to maintain their eligibility for those benefits by, for example, sheltering an inheritance or personal injury settlement/award in a special needs trust.

Special needs planning also involves identifying who will make medical, financial, and legal decisions for a special needs individual. Depending on their disability, that individual may have the capacity to make their own decisions, with or without the support of trusted advisors. When that individual cannot make decisions for themselves, then guardians, proxies, or attorneys-in-fact will be appointed — per the special needs plan in place — to handle those decisions.

What Is a Special Needs Trust and How Is It Funded?

A special needs trust is a trust that is created by a disabled individual under the age of 65 using their own assets and established by either the individual, parent, grandparent, legal guardian, or a Court.

In 2016, Michael J. Amoruso was instrumental in getting Congress to add “the individual” to the law (which was previously omitted), so individuals can create their own trusts, and removed the presumption of incapacity due to a disability. He was invited to the White House to watch President Obama sign the bill into law. Unlike a supplemental needs trust, the special needs trust (since funded with the disabled individual’s own assets so they can qualify for Supplemental Security Income and/or Medicaid) has a required “pay back” to the state for benefits received.

These trusts are often funded using the individual’s assets, an inheritance given outright to the individual, or a personal injury judgment or settlement award received by the individual.

A special needs individual will have their excess assets placed into the special needs trust. When properly designed, the government will not count assets in that trust as owned by the individual. A special needs trust can only benefit the special needs person for whom it is created.

What Is a Supplemental Needs Trust and How Is It Funded?

A supplemental needs trust is a vehicle in which you can leave your assets for the benefit of a disabled or chronically ill loved one who may be receiving public benefits like Medicaid for their care or living situation.

This type of a trust can be used to supplement the quality of life needs of the loved one, and the government cannot recoup against the assets of the trust at the beneficiary’s death. Thus, you determine who inherits the assets of the trust after the beneficiary dies. Unlike a special needs trust, the assets used to fund the trust are from a third-party source (such as a family member or friend).

What Is a SECURE Supplemental Needs Trust and How Is It Funded?

A SECURE supplemental needs trust is a specific type of special needs trust authorized by the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

The SECURE Act requires most individuals who inherit retirement accounts to withdraw the account’s funds within five or 10 years of the decedent’s death. However, the Act created an exception for disabled or chronically ill individuals who inherit retirement accounts. In your estate planning, you can create a SECURE supplemental needs trust to be the designated beneficiary of the qualified retirement account and stretch them over the disabled individual’s lifetime, offering protection and growth. Similar to supplemental needs trusts and special needs trusts, the SECURE supplemental needs trusts enable special needs individuals to preserve their eligibility for means-tested government benefits.