Families take on many burdens when caring for loved ones with special needs. These challenges are often financial in nature, and they can be crippling in many situations. Middle or high-income families may assume that they can shoulder these concerns with relative ease, but the cost of medical treatment and caretaking can be surprisingly high. Inflation also makes these costs become increasingly burdensome with each passing year. How do you plan effectively for your special needs family member? This is something you might want to discuss with an experienced special needs planning lawyer in Florida.
Why Do I Need a Lawyer to Plan for My Special Needs Family Member?
You do not necessarily need a lawyer to plan for your special needs family member. However, working with one of these legal professionals may be advantageous for various reasons. First, you should know that simply setting aside money for your family member may not be as effective as you think. Your loved one might not be able to access this money, especially if you pass away before they do.
Your loved one might not be able to access the funds you set aside after your passing. Even if they could access these funds, they might not have the experience, knowledge, or mental capacity to use them effectively. This presents an estate planning issue that a lawyer can help you resolve. The obvious solution is to establish some kind of special needs trust, although there are many other options worth discussing depending on your unique circumstances.
Lawyers may also help you maintain eligibility for crucial government resources, including Medicaid. Many of these government programs are “means-tested,” which means that they are specifically geared toward low-income families. If you set aside funds for your special needs loved ones, you might end up exceeding income or asset thresholds. This could make it more challenging for your loved one to access health care and other supports.
What Is a Special Needs Trust?
A special needs trust is a popular legal tool used by families with special needs loved ones. Like all other trusts, this represents a separate legal entity. When you transfer your assets into this entity, they are no longer included in your taxable estate.
Trusts are also overseen by “trustees.” These are individuals tasked with protecting the best interests of the trust’s beneficiaries, and they must follow certain rules. A trustee represents a filter or barrier between the beneficiary and the trust assets. Although a beneficiary can access trust funds, they may only receive these funds when the trustee distributes them.
When you transfer trust funds into a trust, Medicaid may still consider them for eligibility purposes. This is why families may need to create special needs trusts rather than standard trusts used for other estate planning needs. Unlike the average trust, a special needs trust shields assets from Medicaid calculations. In addition to helping loved ones qualify for Medicaid, a special needs trust can also help them qualify for Supplemental Security Income and other sources of financial security.
You might wonder why a special needs trust is even necessary, seeing as how Medicaid, SSI, and other programs can provide support for your loved one. You should know that although these programs can cover numerous costs, there are some things that no government programs cover in Florida.
These include expenses that increase the quality of living for your loved one. Some might be described as “basic necessities,” even if they are not covered by SSI or Medicaid. For example, your loved one might use their trust funds to cover cellphone costs, internet bills, and similar expenses. They might also use their trust funds for new clothing, entertainment, and many other things not covered by government programs.
Guardians for Your Special Needs Individual
You might also select a guardian for your special needs loved one. This individual could assume the responsibility for your loved one’s care after you pass away. If your loved one becomes disabled while you are alive, you can also petition for a guardianship.
Financial Planning for Your Special Needs Family Member After You’re Gone
Although you may play an active role in your loved one’s life today, you might be gone one day, and you need to put the foundations in place to ensure long-term stability. This highlights the need for clear, detailed instructions for your special needs trust. Your trustee will follow these instructions, ensuring your wishes are respected even after you’re gone.
These instructions may be more important than you realize. For example, your special needs loved one might mistakenly spend their trust funds on medical costs. If they do this, they might instantly lose eligibility for Medicaid. Simple mistakes like these can be prevented with a responsible trustee who closely follows your instructions.
Spendthrift provisions can also be crucial when providing for loved ones with special needs. A spendthrift provision prevents your beneficiary from accessing the funds all at once. This is a concern for everyone, even if your beneficiary is of sound body and mind. However, this issue becomes especially problematic if your beneficiary struggles with a mental disability or incapacity. It is all too easy for these individuals to waste their inheritance.
With a spendthrift provision, your loved one will only receive a portion of the total trust funds with each distribution. This allows them to cover certain living expenses and maintain their standard of living – all while protecting their underlying financial security.
Can a Special Needs Planning Lawyer in Florida Help Me?
A special needs planning lawyer in Florida may be able to help you assess potential plans for financial security. While caring for a loved one with special needs is never easy, there is no need to shoulder these burdens alone. An experienced lawyer at the Elderly Care Law Firm may be able to help you set the foundations for financial security, without losing access to important resources like Medicaid. To learn more about your options, feel free to schedule a consultation with us today.
