If you are a parent or caregiver of a child with special needs, you may have many questions and concerns about how to plan for your child's future. Whether your child has a developmental disability, a medical condition, or a learning disability, you likely want to make sure that they have the best possible care and support throughout their life.
One of the most important steps you can take is to create a special needs plan. A special needs plan is a comprehensive plan that includes tools related to your child's medical, educational, social, and financial needs and goals. Engaging in proper special needs planning will allow you to provide financially for your child without interrupting any government benefits they might be receiving and for which you likely worked hard to enroll them. These benefits may include Medicare, Medicaid, SSI, or SSD. These government benefits likely provide for the needs of your child, but you may wish to elevate their quality of life by setting aside funds for luxury items.
As such, a solid special needs plan should include legal documents that protect your child's rights and interests, such as a will, a trust, a guardianship, or a power of attorney. A guardianship or estate planning attorney can assist you in utilizing the legal tools necessary to secure your child’s future.
One of the most important steps you can take is to create a trust for your child. A trust is a legal arrangement that allows you to set aside money or property for your child's benefit without affecting their eligibility for public benefits. A trust can also protect your child's assets from creditors, lawsuits, or misuse by others.
One such trust, known as a third-party supplemental needs trust (SNT), is funded with assets from someone other than your child, such as yourself, a relative, or a friend. A third-party SNT can be established by anyone at any time during your child's lifetime or after your death through your will or trust. A third-party SNT does not have to pay back Medicaid upon your child's death.
Trusts for disabled individuals are managed by a trustee who has the discretion to make distributions for your child's benefit according to the terms of the trust. The trustee can use the trust funds to pay for expenses that enhance your child's quality of life but are not covered by public benefits. These may include education, recreation, travel, clothing, furniture etc.
However, if your child is receiving SSI (as opposed to SSA or SSD), the trustee cannot use the trust funds to pay for basic necessities such as food shelter utilities medical care etc., as these may reduce or eliminate your child's eligibility for public benefits. The trustee must also keep detailed records of all transactions and report them annually to Medicaid if required.
Another important step you can take is to appoint an Article 17A guardian for your child. A guardian is someone who has the legal authority and responsibility to make decisions on behalf of your child when they turn 18 and are no longer considered a minor. A guardian can make decisions about your child's personal care health education finances etc., depending on the scope of their authority granted by a court. A parent usually petitions the court to become their child’s 17A guardian close to their 18th birthday. If your child is only physically disabled and mentally competent to sign legal documents, it may be possible to avoid a guardianship by having them sign a Power of Attorney and a Health Care Proxy. This will allow you to handle their financial affairs and make their medical decisions if they are ever unable to do so.
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Creating trusts and applying for guardianship can be complex and requires careful planning and drafting. You should consult with an experienced estate planning attorney who specializes in special needs planning in New York State. An attorney can help you determine which options are best suited for your situation and guide you through the process of establishing them. Special needs planning can provide peace of mind and security for both you and your child. Call the experienced attorneys at the Law Offices of Roman Aminov, P.C. at 347-766-2685 to discuss establishing a plan for your family.
This article is for educational purposes only - to provide you general information, not to provide specific legal advice. Use of this post does not create an attorney-client relationship and information contained herein should not be used as a substitute for competent legal advice from a licensed local estate attorney in NY or your state.