Special Needs Planning

Planning for a loved one with special needs is a service the attorneys at Racine Olson very honored to be able to provide to our clients. Individuals with special needs bring much joy and perspective into our lives. Our special needs loved ones often require a significant amount of our time and energy and, as a result, planning to care for such loves is a very important task.

The attorneys at Racine Olson can help you plan to care for your loved ones with special needs. Whether you need assistance with obtaining guardianship and/or conservatorship, seeking or maintaining certain government benefits, or whether you desire to ensure your loved one with special needs receives proper care after your death, we can help.

For many individuals with special needs maintaining continuity and stability is crucial for their well-being. Many parents of children with special needs prepare a life care plan for their children to help their children become as independent as possible. To reach this result or optimal independence, planning must be deliberate and with consideration for any and all government programs and benefits received by, or available to, our loved ones with special needs. We have the experience and knowledge to help you plan for your loved ones with special needs.

Special needs trusts (sometimes referred to as Supplemental Needs Trusts) must be properly drafted after considering the circumstances of an individual with special needs. In Idaho, there are two common types of special needs trusts: first-party and third-party special needs trusts.

Third-party special needs trusts are typically used in situations where parents desire to leave a portion of their estate to care for a child with special needs. Historically, parents of a child with special needs would simply disinherit the child to ensure the child did not become ineligible for the need-based government programs which provided the child stability and continuity. However, disinheritance is no longer the only option for parents who do not want to compromise their child’s eligibility for government programs.

A third-party special needs trust must be carefully drafted by an attorney with knowledge of the complexities surrounding maintaining eligibility for government benefits. Monies in the trust must not be used to supplant the benefits received from government programs. Perhaps most importantly, the beneficiary must not have the ability to control the funds in the trust.

Special needs trusts help parents of special needs children ensure their child’s well-being after the parents pass away. The trustee of a special needs trust must distribute the funds for the benefit of the special needs beneficiary and to improve the beneficiary’s quality of life. Not only may the trust help supplement basic needs, but the trust monies may also be spent on the beneficiary’s hobbies or other interests.

Generally speaking, first-party special needs trusts are governed by provisions of the Social Security Act, specifically 42 U.S.C. § 1396p. First-party special needs trusts are funded with property owned or controlled by the special needs individual. These trusts must contain provisions distinct from third-party trusts. For example, generally speaking, first-party trusts must contain a “payback” provision requiring the trust to reimburse government agencies after the death of the beneficiary for government monies paid by the government on behalf of the beneficiary.

First-party special needs trusts are typically utilized in situations where a special needs individual is receiving government benefits before coming into additional monies. For example, when a special needs individual inherits money from a family member who failed to establish a third-party special needs trust for the beneficiary. Another common example of a typical situation involves a special needs individual who receives settlement proceeds from a personal injury action.

Prior to December of 2016, first-party special needs trusts could only be established either by courts, guardians, or parents of the special needs individual. However, in December of 2016, Congress amended the law to allow special needs individuals to establish first-party trusts for themselves, when capable. This statutory amendment follows recent policy changes regarding special needs individuals which seek to honor the special needs individual’s independence as much as possible.

The Racine Olson Elder Law, Medicaid Planning, and Estate Planning attorneys can help to care for your loved ones with special needs. We are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation with the Racine Olson team of Elder Law, Medicaid Planning, and Estate Planning attorneys in Idaho. You can also email us directly at racine@racinelaw.net.