Parents of special needs
children frequently go through life tackling difficult problems, handling
each task “one day at a time.” However well-meaning the theory of taking
things “one day at a time” is, it means most people focus solely on the
present and they fail to plan for the future. Unfortunately, many parents of
special needs children handle things one day at a time and fail to take
necessary steps to provide for their children after they are gone.
Imagine
what would happen if a student graduated from high school and wanted to go
to college. Late August rolls around, and his or her friends are packing
into cars to go to their first day of undergraduate studies. However, the
student in our example has not purchased books, arranged for a dorm room,
chosen classes, or even sent in an application for the school of their
choice. What happens to them? They don’t go to school unless it’s late
registration at a community college, and it may not even have the classes
the student wants. While the community college may be great, the reality is
that he or she had no choices because they did not plan ahead. People that
plan ahead get choices and options.
Parents of special needs
children want their children to be provided for, but they want more than
just a basic existence. They want their child to look forward to something,
even if it is as simple as a day at the park on weekends, a steady supply of
new magazines and books, and some more simple comforts. However, these are
completely out of reach if a child has no funds, and the federal government
makes sure a person has very few funds in order to qualify for most
assistance programs. Those items are out of their reach if their parents
failed to take the steps necessary to provide for them.
However, there are steps
parents can take to make sure that their child is taken care of after they
are gone. More importantly, there are ways to do this without giving up
control of their destiny to a total stranger, corporation or government
bureaucracy.
One technique of providing
for your child without disqualifying them for government assistance is
fairly simple to understand, and one variation or another is probably right
for most special needs children. A
The emphasis above is on the
word “right.” If the child has any right to demand money, then most federal
regulations state that all of those funds must be used to pay for assistance
before the government will step in and provide for the basic maintenance of
the special needs person. However, the trustee can spend money in a variety
of ways that does not violate federal regulations. Money can be spent to
take the special needs beneficiary to the movies, transport relatives to
visit the child, pay for elective surgery or medications not covered by
Medicaid, swimming lessons or lease equipment in the name of the trust that
the beneficiary can use. These items do not currently disqualify a special
needs person from federal assistance because it does not place any property
in their name or make assets available to them for their unfettered use. A
properly drafted Medicaid Exemption Trust clearly states that the
beneficiary is not entitled to funds, and the trustee must make expenditures
that do not disqualify the beneficiary from assistance.
What
is most important for many people is that the people they trust are still in
charge of the funds they left behind for their loved one. There are some
group plans that offer trust planning services for special needs parents,
but the corporation typically assigns itself as trustee in order for the
parents to participate in the program. In other words, the trust company
handles the money, the trust company decides who provides services,
the trust company decides what extras the beneficiary receives, and
the trust company decides how funds are invested. While this may be
good for some people, most parents prefer to have people they trust
make these important decisions. Their brother or sister, another child, or a
close family friend are common examples of people appointed as trustees.
A common misconception is
that a trustee must also be in charge of the special needs person’s daily
care. However, just because someone is placed in charge of the funds does
not mean that they are responsible for the constant care of the special
needs child without help. In many cases, the special needs person resides in
an assisted living facility paid for through government assistance programs,
and their basic, daily needs are handled through their home. It is the added
necessities and comforts that the trustee can authorize and oversee.
There are certainly better
options than simply giving everything over to a corporation or allowing all
funds to be used up before government assistance will help. A Medicaid
Exemption Trust may be the best option to plan for your special needs
child’s future, and it should be considered part of an effective overall
estate plan prepared by an attorney experienced in this field.
For more information, Contact Us.
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