If you are the parent or loved one of someone with special needs, we know there’s a lot to consider when it comes to caring for your child or loved one after you are gone. Today we take a close look at some of the nuances of estate planning as it pertains to the Special Needs Trust (SNT) in Atlanta.
What is a Special Needs Trust
A Special Needs Trust, also known as a Supplemental Needs Trust, is a very specific legal contract that provides resources and assets for a beneficiary with special needs. Generally speaking, leaving money to someone with special needs can be very complicated. This is because there are government benefits available to those with special needs or those found disabled according to the rules of the federal government. If benefits are awarded to an individual, there are very specific rules that must be followed as it pertains to assets and properties owned by the claimant– that is the person receiving those government benefits. If an inheritance is bestowed upon that claimant, that gift could make them ineligible for those government benefits and that generous gift could do more harm than good. Hence, the need to protect the claimant’s eligibility while still providing for their additional needs.
This is the purpose of the Special Needs Trust in Atlanta. It is to create a Trust, managed by someone other than the beneficiary, which will allow their additional needs to be met financially. Because the beneficiary doesn’t control the funds, the government does not consider those funds to be assets– thus protecting the beneficiary’s eligibility for government benefits.
Reasons for a Special Needs Trust
There are many reasons for creating a Special Needs Trust. Below we’ll take a closer look at the main concerns of many parents and loved ones, and why those concerns are valid.
Protecting Access to Government Benefits
Government Benefits are vital to those living with special needs. Some parents and loved ones are concerned that their gift may knock their loved one out of eligibility for these costly resources. Others may be concerned that while their child does not need these government benefits now, they will eventually need access to them. Perhaps the beneficiary has a condition that is stable now but will deteriorate over time. The ultimate purpose of the Special Needs Trust is to provide for the needs and care that are not covered by government benefits.
Protecting Supplemental Security Income (SSI) Benefits
SSI is a Social Security disability program created for those on a needs-basis. The program awards benefits to those who are disabled according to the Social Security Administration’s medical rules. But before benefits can be paid out a financial audit is completed. Only those with countable resources less than $2,000 can actually receive SSI. This means that other than one vehicle and one residence, the amount of money in the bank allowed at any given time is less than $2,000.
Often this means that children with disabilities or special needs, while minors, may be approved for SSI medically– meaning, they are disabled according to the medical rules and meet the medical requirements to receive this benefit. However, they never receive the benefits because the resources owned by their parents or household exceed the $2,000 limit. But, when that child turns 18 years old a new set of rules are applied to them. The $2,000 limit is still in place; however, the parental resources are no longer counted. Which would likely mean that they will receive those benefits when they reach the age of 18.
This is where estate planning can get tricky for you as the benefactor. Because it’s easy to think “my (minor) child isn’t eligible for SSI” and create an estate plan that acts as such. But the truth of the matter is: your child isn’t eligible for SSI yet.
So, remember, if your child or loved one is a minor, there may be financial circumstances within their household preventing them from receiving SSI and a Special Needs Trust will allow them to receive these crucial government benefits in adulthood while still being assisted by your estate at the same time.
Protecting Medicaid Coverage
Medicaid is another government benefit potentially available to those with special needs. Medicaid is the insurance coverage provided to those who are found to be disabled by the Social Security Administration, meet the financial requirements, and are awarded SSI benefits. Again, the same financial restrictions fall into place as those listed above.
But SSI is not the only way to receive Medicaid coverage. The state of Georgia offers children below the age of 19 Medicaid if their household’s income is below a specific federal poverty level– depending on the child’s age and number of children in the household.
This is a crucial resource for those with special needs and disabilities, so it is important to protect eligibility here as well. Again, a Special Needs Trust does that. It creates a place for assets to be held for the benefit of a beneficiary with special needs, but those funds are not accessible by the beneficiary. So again, the government will not consider these funds or count them against the beneficiary’s resources.
Providing Resources for Care Not Covered by Medicaid
Many parents and loved ones of beneficiaries with special needs want to make sure their loved one is taken care of as if they were still around. Often, a parent is the sole caretaker of a disabled child for several decades. They may maintain excellent care up until their death. It is understandable that a parent or loved one would want to provide that same level of care even after they are gone.
A Special Needs Trust can be used to do just that. It can shelter funds for the benefit of your beneficiaries, leaving their entitlement to needs-based government benefits in place, but also allowing for special housing or specialty caretakers not covered by Medicaid.
A Special Needs Trust in Atlanta is a Very Important and Incredibly Complicated Document
We always recommend seeking the assistance of a skilled attorney when considering your estate planning options– especially when it comes to this type of Trust. We are here to help guide you through the process and provide peace of mind as you determine the best way to care for your family and loved one. Call us to schedule a consultation.
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