Disability and Special Needs Planning

Disability or special needs planning is crucial for protection. At Puff, Sierzega & MacFeeters, we firmly believe that nothing is more important than the protection of your family and loved ones.

Families with special needs children, siblings, parents, or spouses, are especially in need of proper planning to adequately tailor their goals, objectives and needs, while utilizing state and federal government benefit programs. Families with disabled loved ones understand how crucial it is for their loved ones to receive the appropriate level of care and attention that their special circumstances require.

A common goal is to maximize government benefit programs, such as Supplemental Security Income (SSI), Social Security Disability Income (SSDI) and Medicaid. Because these government programs are means-based, they enforce strict financial limitations on personal eligibility.

Accordingly, receipt of resources or assets would disqualify a disabled individual from the needs-based programs they rely upon, which could disrupt their standard of living. For instance, if parents with a special needs child pass-away and leave the child as a beneficiary, either by will or by life insurance designation, the special needs individual’s inheritance would disqualify him or her from their government benefit program. Therefore, proper and specific special needs planning is crucial for families with disabled loved ones.

Special Needs Trusts

The keystone of disability or special needs planning is the use of a Special Needs Trust. A special needs trust, also known as a supplemental needs trust, is intended to allow a disabled individual to maintain eligibility for needs-based government benefit programs, while also providing supplemental resources to improve their quality of life.

Since government benefit programs are only intended to provide disabled individuals with basic needs – such as food, shelter, clothing, and medical care – a special needs trust provides non-necessaries items – such as birthday and holiday gifts, electronics, educational expenses and vacations.

Overall, the purpose of the trust is to supplement, not supplant, government benefits. Special Needs Trusts are subject to stringent legal requirements in order for the trust to operate correctly by excluding the corpus of the trust from the disabled beneficiary’s personal income calculation.

The most important requirement is that the State must receive all amounts remaining in the trust upon the death of the trust beneficiary up to the amount equal to the total medical assistance paid on behalf of the individual under a State plan. In addition, the trust must contain, with specificity, the key language, “the purpose of the trust is to permit the use of trust assets to supplement, not supplant, impair or diminish, any benefits or assistance of any Federal, State or other governmental entity for which the beneficiary may otherwise be eligible or which the beneficiary may be receiving.” Further, the trust must state that it is for the sole benefit of the beneficiary and be irrevocable.

The regulatory provisions controlling special needs trusts are codified at the Federal level in 42 U.S.C. § 1396p(d)(4)(a) and in New Jersey in N.J.A.C. 10:71-4.11(g)(1).

Disability and Special Needs Planning as a Part of Overall Estate Planning

For families with special needs loved ones, disability and special needs planning is a critical component of your overall estate plan. As described above, proper estate planning for special needs individuals can utilize, and maximize, government benefit programs, while providing additional non-necessary support that will enhance your loved one’s quality of life.

In order to properly plan, however, a comprehensive estate plan needs to coincide with disability and special needs planning, so as to not disqualify a disabled individual from receiving government benefit assistance. Accordingly, a family should consult and discuss with their estate planning attorney their estate plan, including their wills, non-probate asset beneficiary designations (i.e., life insurance designations, pay-on-death account beneficiary designations, etc.) and other possible trusts. At Puff, Sierzega & MacFeeters, our experienced estate planning attorneys can serve your families disability and special needs planning goals and objectives with personal care and attention.

Our approach to planning for disabled individuals is to be proactive and tailor a special needs trust to adequately and efficiently supplement government benefits to improve their quality of life. In addition, our estate planning attorneys can serve your overall estate planning needs such as wills, trusts, guardianships, power of attorney, Medicaid planning and more. To schedule a consultation with one of our disability planning and special needs planning attorneys, please call our office (856) 845-0011 or email us.

Disabled Child Planning