Special Needs Trusts

/Special Needs Trusts

What Can Go in a Trust?

For the parents of a special needs child, ensuring lifetime comfort and care can seem like a bit of a financial catch-22. In order to qualify for government benefits, including Medicaid, the special needs individual can have only limited income and assets. But the government benefits alone don’t provide enough to live on comfortably. 

That’s where a special needs trust comes in, helping cover not only medical expenses and caregiving costs, but also travel, education, entertainment, pet care as well as many other things things that can maintain and enhance the quality of life for a special needs individual. 

Special needs trusts, however, have no value until they’ve been funded. And deciding how to fund the trust is a challenge of its own—one that requires professional guidance to avoid errors or even disastrous financial missteps.  

How Do You Fund a Special Needs Trust?

Parents of a special needs individual will likely open a third-party trust. However, it’s worth noting that if the special needs individual has independent assets, including any personal injury settlements, those will need to go into a first-party special needs trust. 

With a third-party trust, the entire family can help out. In fact, it’s important that grandparents, aunts, uncles and other relatives and friends understand that major gifts and inheritances should go in the trust, not directly to the special needs individual.

When funding a third-party special needs trust, parents, other family members and friends can include:

  • Checking, savings, money market, and investment accounts. If you also hold CDs, check with your financial institution to be sure they can be retitled to the trust without penalty prior to maturity. 
  • Retirement accounts.  While you can’t transfer the ownership of an IRA or 401(k) while the owner is alive, the account owner can name the trust as the beneficiary. And with the recent changes to distribution rules for inherited IRAs under the SECURE Act of 2019, a trust for a child with special needs may be the most tax-efficient possible beneficiary for a retirement account. 
  • Real estate. The family home is often a place of familiarity and security for a family with a special needs child, as well as a major investment. If the property is sold or rented, proceeds benefit the trust. If the special needs child passes away before siblings or other beneficiaries, the property can be transferred from the trust. If you plan to continue housing a special needs child in the family home, be sure that there are also enough funds in the trust for upkeep of the property. 
  • Insurance. Life insurance payouts can benefit a special needs trust, providing lasting income for a beneficiary. It helps to be savvy with policies, however. Some families choose survivorship policies, which are often more cost-effective as they only begin payments after the death of both members of a married couple.  

How to Plan

It takes careful consideration and individualized focus to set up and fund a special needs trust properly. Even then, families can expect to regularly update and adjust their funding plan as their investment profile changes over the years. A special needs lawyer can help establish a trust and provide regular feedback, as well as connect clients to trusted financial planners for advice on how much to put aside.

Speak With an Atlanta Special Needs Lawyer

If you’re the parent or loved one of an individual with special needs, you’ll want help protecting his or her financial future. At Nadler Biernath, we have experience creating and funding trusts. Call us today at 770-999-9799 to schedule your initial consultation to discuss how we can help your loved ones. 

Do I Need Guardianship?

Deciding whether to seek guardianship is one of the most challenging legal questions the parents of a child with special needs may face. While parents cannot begin the process of seeking guardianship until six months before their child turns 18, it’s helpful to give it careful thought long before then, with input from care providers and educators, if appropriate.

Guardianship is meant to protect the child, or ward, into and through adulthood—placing financial, medical, housing and other life decisions in trusted hands. The guardian, who is appointed with ward’s best interests in mind, helps care for the special needs individual, respecting his or her dignity and rights while managing the logistics of care, education and health.

What is Guardianship?

A parent’s right to make medical, legal and financial decisions for his or her child ends when the child turns 18. If you have a child with special needs, however, he or she may not be able to make these decisions alone. In Georgia, there are two main types of guardianship, though the same person often holds both roles:

  • Guardian—manages healthcare and medical decisions, housing and food
  • Conservator—manages finances, earnings and property

While anyone over 18 may petition for guardianship/conservatorship, parents or other family members often take on the role. Professional Guardians may also be appointed, in some circumstances.

Understandably, considering the seriousness of the process, it’s time consuming and often expensive to receive guardianship. When hearing a petition for guardianship, the court is making two determinations. First, whether the ward is incompetent to make “significant, responsible decisions.” Second, who is the best person to serve as a Guardian and/or Conservator.  It’s up to the petitioner to prove that the would-be ward is incapacitated to the extent that guardianship is necessary and that the proposed guardian is the best person to do the job.

The court expects regular updates to ensure that the ward is being cared for and properly represented. Shortly after the appointment, and then again annually, the guardian must file a personal status report, detailing, among other things, the ward’s condition and describing the ward’s housing over the past year. If a conservatorship is in place, financial decisions must be recorded and shared.

Deciding whether to seek guardianship is challenging, but if a special needs individual is unable to make critical decisions alone, it’s often necessary. Importantly, guardianship does not remove the individual’s own voice from conversations about his or her life and care. On the contrary, Georgia law stipulates that guardians should encourage wards, if they’re able, to participate in decisions. It’s also a guardian’s duty to keep the ward’s desires and values in mind, if they’ve been expressed.

Speak With an Atlanta Special Needs Lawyer

If you’re the parent or loved one of an individual with special needs, you’ll want help protecting his or her interests. At Nadler Biernath, we have experience seeking guardianship when it’s necessary. Call us today at 770-999-9799 to schedule your initial consultation to discuss how we can help your loved ones.

 

By | 2020-02-11T16:11:15+00:00 February 10th, 2020|Latest News and Events, Special Needs Trusts|0 Comments

Estate Planning For Families With A Special Needs Child Business Radio X

Estate Planning For Families With A Special Needs Child Business Radio X

Nadler Biernath attorney Kim Martin had the privilege of appearing on Gaslowitz Frankel’s Wealth Matters radio show, discussing how to estate plan when you have a special needs child. It was a great conversation, and if you weren’t able to listen live, you can watch the show on YouTube, or listen through Business Radio X’s website. Click to view the video on YouTube below, and be sure to read more on our FAQ’s page and within the Special Needs Planning Section of our website.

 

Spread The Word To End The Word

Community Leaders from Best Buddies and the Special Olympics have combined to create a campaign to end the use of the word “retard”. March 7, 2012 marked the day to stop using the r-word in any form of speech including medical terminology.

The website, www.r-word.org, describes how the terms “medical retardation” and “mental retardation” began as medical terminology with specific clinical connotation but those words have shifted into every day conversation with a hurtful meaning. Using the r-word to individuals with disabilities or their families and friends has lasting effects.

The efforts of the campaign have made some incredible progress. The American Medical Association has announced that they recommend “editorial revisions” to certain medical documents by deleting the term “mentally retarded” and inserting “individuals with intellectual disabilities”. Even though the revisions have to be approved, it is still a positive step toward erasing the r-word from our vocabulary.

For more information including articles and videos or if you would like to make the pledge to stop using the r-word visit the organization’s website at: www.r-word.com.

This blog entry serves as educational purposes only and does not constitute legal advice.

By | 2020-04-15T21:39:26+00:00 March 13th, 2012|Estate Plan, Latest News and Events, Special Needs Trusts|0 Comments

Misappropriating Trust Funds

There are serious consequences if a trustee misappropriates trust funds.

An example of this recently occurred in Port St. Lucie, Florida. John Morgan was arrested on a grand theft charge for reportedly stealing more than $40,000 from his adult daughter’s special needs trust fund. His daughter, Sandra Morgan, who suffers from cerebral palsy and lives in a group home, was awarded $65,000 from a settlement due to a wheel chair accident that resulted in injury. Reports indicate that Morgan spent the money on personal items such as bills and purchasing a new car. Police said Morgan spent a total of $40,966.56 of his daughter’s money for his personal benefit.

For full story link here.

This blog entry serves as educational purposes only and does not constitute legal advice.

By | 2020-04-15T21:40:58+00:00 February 7th, 2012|Estate Plan, Latest News and Events, Special Needs Trusts|0 Comments

Stem Cell Fraud

The use of the World Wide Web has allowed families with special needs individuals to discover new therapy techniques, medical breakthroughs, doctors, and lawyers to ensure that the individual lives the best life possible. While there is a wealth of beneficial information on the internet there are also scam artists that target families with special needs individuals.

One form of these scam artists is described in the video below. An American born doctor that lost his license to practice medicine in the United States has set up a stem cell laboratory in South America. He now benefits from charging thousands of dollars to families that will try everything to improve the quality of life for their loved ones with special needs.

This blog entry serves as educational purposes only and does not constitute legal advice.

By | 2020-04-15T21:41:04+00:00 January 16th, 2012|Latest News and Events, Special Needs Trusts|0 Comments

How A Special Needs Trust Benefits

Special Needs Planning

Special needs planning is the concept of leaving assets for your child with special needs in such a way that does not render them ineligible for benefits. As you may know, Medicaid and Social Security Income have resource limits. If the individual has more than $2000 in “countable resources” then he or she is not eligible on the financial side to receive Medicaid or SSI.

Special Needs Trust Atlanta

But the good news is, there are specialized legal tools that we can use in order to protect the assets for a special needs individual. A special needs trust allows a special needs individual to receive assets and his or her Medicaid or SSI benefits will not be affected.

This blog entry serves as educational purposes only and does not constitute legal advice.

By | 2020-05-08T05:16:39+00:00 November 28th, 2011|Latest News and Events, Special Needs Trusts|0 Comments