Understanding Special Needs Estate Planning

October 25, 2023
Erin Calpin, Esq.

Ensuring a secure and fulfilling future for a loved one with special needs is a paramount concern for many families. Special needs estate planning, a multifaceted and often intricate field, emerges as a vital tool in addressing this concern. It's not merely about financial arrangements; it's about crafting a comprehensive strategy that safeguards an individual's well-being, safeguards access to essential services and government benefits, and guarantees that quality of life remains intact. In this blog, we help you to understand special needs estate planning, unraveling the essential components, strategies, and considerations that will help you navigate this complex but deeply important aspect of securing your loved one's future.

What Is Special Needs Estate Planning?

Special needs estate planning, also known as special needs planning or disability estate planning, is a branch of estate planning that focuses on providing for the financial and care needs of individuals with disabilities or special needs, both during their lifetimes and after their parents or caregivers are no longer able to provide support. The primary goal of special needs estate planning is to ensure that the individual with special needs can maintain his or her quality of life and access necessary services and support while preserving eligibility for government benefits and assistance programs, such as Supplemental Security Income (SSI) and Medicaid.

Here are some key components and considerations of special needs estate planning:

1. Trusts: One of the central tools in special needs estate planning is the special needs trust (SNT). This type of trust is designed to hold and manage assets for the benefit of a person with special needs without jeopardizing eligibility for government benefits. There are two main types of SNTs: first-party SNTs (funded with the individual's own assets) and third-party SNTs (funded with assets from someone other than the individual with special needs).

2. Guardianship and Conservatorship: Special needs estate planning may involve appointing a legal guardian or conservator to make decisions on behalf of the individuals with special needs, especially if they are not able to make informed decisions themselves.

3. Letter of Intent: This document provides detailed guidance to caregivers and trustees about the individual's needs, preferences, and routines. It helps ensure that the person's wishes are followed and that his or her quality of life is maintained.

4. Beneficiary Designations: Naming the individual with special needs as a beneficiary on retirement accounts, life insurance policies, and other financial instruments should be done carefully to avoid disqualifying the individual from government benefits. Special needs planning often involves setting up the SNT as the beneficiary instead.

5. Medicaid and SSI Eligibility: Special care is taken to structure financial assets and inheritances in a way that does not exceed asset limits for Medicaid and SSI eligibility.

6. Public Benefits: Understanding the various government programs, including Medicaid, SSI, and Social Security Disability Insurance (SSDI), and how they may impact the individual's financial situation is crucial in special needs estate planning.

7. Life Care Planning: Beyond financial considerations, special needs estate planning may involve creating a life care plan that outlines the necessary medical care, housing, and support services the individual will require.

8. Family Dynamics: Special needs planning often takes into account the family dynamics, including the roles and responsibilities of siblings and other family members in providing support and care.

Special needs estate planning is highly individualized, as each person's needs and circumstances are unique. It is typically advisable to work with an attorney experienced in this area, as well as financial advisors and other professionals who can help navigate the complex legal and financial aspects of planning for the future of a loved one with special needs.

Can I Develop a Special Needs Estate Plan on My Own?

It’s always advisable to work with an experienced attorney who specializes in special needs planning. Special needs estate planning involves complex legal and financial considerations, and making mistakes or overlooking important details can have serious consequences for the individual with special needs.

Here are some reasons why working with a qualified attorney is recommended:

1. Legal Expertise: Special needs estate planning involves a thorough understanding of federal and state laws, including those related to government benefit programs like Medicaid and Supplemental Security Income (SSI). An attorney with experience in this area can navigate these laws effectively.

2. Customization: Every individual with special needs has unique circumstances, and a plan should be tailored to meet that individual’s specific requirements. An attorney can help create a plan that addresses the individual's needs, goals, and wishes.

3. Avoiding Pitfalls: Special needs planning involves intricate rules and regulations, particularly when it comes to special needs trusts (SNTs). An attorney can help ensure that your plan complies with these rules and avoids pitfalls that could jeopardize the individual's eligibility for government benefits.

4. Maximizing Resources: An attorney can help you maximize the use of available resources, protect assets, and identify potential sources of support, which can be crucial for ensuring the individual's financial security.

5. Updates and Changes: Special needs planning is not a one-time event. Laws, circumstances, and the individual's needs may change over time. An attorney can help you periodically review and update the plan to ensure it remains effective and up-to-date.

6. Peace of Mind: Working with a qualified attorney can provide peace of mind that you have taken the necessary steps to provide for your loved one with special needs and protect your loved one’s future.

While you can certainly start by gathering information and educating yourself about special needs planning, it's advisable to consult with an attorney who can guide you through the process, answer your questions, and help you make informed decisions. Your attorney may also work in collaboration with financial advisors and other professionals to create a comprehensive plan that addresses all aspects of your loved one's needs and future.


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Borenstein, McConnell & Calpin, P.C. is a Wills & Estate Planning law firm serving Central and Northern New Jersey, as well as New York City. We strive not only to give you a great client experience, but to become your trusted adviser for life. To reach Alec, please send an email to alec@bmcestateplanning.com.

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