Special Needs Planning

One the most important planning steps that can be accomplished with estate planning is to provide for children, grandchildren, or other family members with special needs. Special Needs Planning is a over-arching term used to describe planning for persons with disabilities or illness that will often require Trust funds to be held for a beneficiary’s lifetime. Of critical importance, a well designed special needs trust will not interfere with or impair a beneficiary’s ability to also benefit from governmental assistance programs such as Medicaid or Social Security. Instead, the Special Needs Trust can act to supplement, but not replace, that assistance otherwise in place. This means special benefits that can dramatically add to an individual’s quality of life and happiness can be paid from the Special Needs Trust, when otherwise unavailable. Examples include: personalized ultra-lightweight wheelchairs, private rooms, and extra therapy sessions. Special Needs Trusts can even hold title to real estate, such as a home for a beneficiary, to provide a personalized environment for the beneficiary while ensuring proper management and that expenses are paid by a chosen Trustee.

Ideally, Special Needs Trust provisions are adopted as part of an overall estate plan and simply remain as contingent provisions to come into place upon the death of the Grator (when distributions to beneficiaries are funded). In that manner inherited assets never actually come into the ownership and possession of the beneficiary with the incapacity or disability. This pre-planning ensures that ongoing benefits are not disrupted. However, Federal and State law also allow for special needs trusts to be established after an inheritance has already vested. In that case, special care must be taken to comply with the strict exception rules under the applicable statutes.

Drafting Special Needs Trusts to fit the personalized needs of a beneficiary is one of the biggest benefits of proactive estate planning.