Dealing with a family member with special needs can be challenging and stressful. What will happen with their care in the future? How will they sustain themselves economically? Planning for their future is a large part of planning for your estate. You don’t want them to lose the government benefits they are receiving because you leave them an inheritance.
A special needs trust contains assets of a disabled person, established before they reach 65 years of age. It can be set up by the parents, grandparents, legal guardian, or even the court. This trust is excluded from Medicaid rules that ensure their benefits are maintained. Even so, it must comply with all federal and state regulations.
New Jersey has several state services for its disabled residents. The Commission for the Blind and Visually Impaired provides rehabilitation in the fields of education and vocation, summer programs, development programs for children and youth, and referrals to other services. The Division of the Deaf and Hard of Hearing helps people access related services and devices, such as hearing aids, text telephones, etc. They also provide sign language courses for hearing family members. The Division of Developmental Disabilities focuses on people with autism, the cognitively divergent, those who have cerebral palsy, spina bifida, and TBI (traumatic brain injuries). It comprises five centers where people with developmental disabilities are given round-the-clock care. It also licenses other private supported living facilities. The Division of Disability Services refers people with disabilities and their families to the services they need for the disabled person to live more independently. Lastly, The Division of Mental Health Services offers a variety of services, including counseling, case management, a residential program, and a day program. They have in-patient care for those with mental illness and run five psychiatric hospitals in New Jersey.
Federal aid for disabled people encompasses four major resources: Supplemental Security Income (SSI), Social Security Disability Income (SSDI), Medicare, and Medicaid. Some of these impose a maximum income to receive benefits.
You want your loved one to enjoy their life without economic limitations. Still, it needs to be established by an experienced lawyer who can create a trust that falls within the rules regarding state and federal limitations. Government benefits could be jeopardized if you want to leave your loved one an inheritance and a special needs trust is not created. Public assistance programs for special needs people are designed based on restricted income and assets. Still, the money in the trust isn’t considered when applying for public assistance as long as it is not used for certain expenses such as food and shelter. The money from the trust is frequently used for medical expenses, caretakers, transportation, and other specified items.
People with a disability can access more funds through a Supplemental Benefits Trust (SBT), which preserves their government benefits and other “means-tested” financial aid such as Medicaid. Means tested benefits are those you qualify for based on your income (usually low income). The problem with Medicaid is that after the person has died, they will charge the estate for any financial assistance or medical care covered and is now owed. This does not happen when you have an SBT.
An SBT is composed of money and assets donated by a third party. This can be a family member or friend. It must be created before the recipient is 65. It is exempt from any charges and does not count as income because it never belonged and never will belong to the disabled person, so a trustee must be named who decides what is done with the funds. One must be very careful with the language regarding the trust, avoiding reference to a gift directly to the disabled person as this would change the trust to a direct asset.
Some of the benefits of developing a special needs plan are: retaining government benefits, preventing the estate from being taken by Medicaid, naming trust beneficiaries, making sure housing and medical costs won’t drain the loved one’s assets, and appointing a trustee who will manage the trust responsibly.
The more you do to prepare for the financial well-being of your loved one, the more confidence you will have that come what may, they will be well taken care of. It is never easy to think about things drastically changing, but you can make that transition easier by working with an experienced special needs planning lawyer like the ones at Chamlin, Uliano, & Walsh.
When discussing the unique needs plan’s legal and financial requirements, there are four items to consider. First, a trust must be made to protect the loved one financially. Upon the caregiver’s death, the disabled person must be assigned a suitable living situation at home or in an assisted living facility. A guardian should be named if a caregiver is incapacitated or passes away. Insurance should be bought to cover the loved one’s expenses should the caregiver no longer be able to take care of them.
Call us at (732) 440-3950 for a free consultation to discuss your special needs planning concerns. Our job is to work with you to create a plan that provides you with the peace of mind you need regarding your disabled loved one. We have the experience to offer various solutions and provide a compassionate, professional environment for our clients in Toms River, Freehold, Asbury Park, Red Bank, Long Branch, Middletown, Colts Neck, Rumson, and elsewhere in Monmouth County and South Jersey. Fill out our convenient contact form to see what we have to offer and get additional assistance with your loved one’s case today.
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