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Greetings! We hope you’ve found our month-long Estate Planning articles informative.  As you may have learned there are many ways to arrange an estate plan for the care of loved  ones who become incapacitated. This aspect of estate planning is especially critical for loved  ones with special needs. We are thus concluding this month’s article by detailing the importance of a Special Needs Trust. 

It takes careful planning to adequately provide for a loved one with a disability. One of the primary goals of special needs planning is to help those individuals preserve their eligibility to public benefits like Medicaid or Supplemental Security Income (SSI). Eligibility for these  programs is typically asset-based, and special needs individuals with even a modest inheritance  or personal injury settlement/ award may find them disqualified from receiving much needed  services that they cannot afford despite having some assets. As a result, preserving benefit  eligibility is paramount in preventing many special needs individuals from spending everything  they own just to obtain necessary care. 

Financial concerns are not the only issue that makes planning for the future extremely  important. Quality of end-of-life care or detailing certain medical restriction is also very  important when dealing with a loved one who has special needs. By planning now, you can  ensure that he or she will be in good hands in the future and that his or her needs are met. 

Special needs planning plays an important part in the lives of people with disabilities.  There are many who need a special needs estate plan to assist them. Special needs estate plans are mostly created for individuals who will never be able to live on their own as a result of  certain conditions. This can include Autism, Down Syndrome, Parkinson’s, Alzheimer’s, ALS or  a progressively debilitating diseases. The most effective way to ensure that you have adequately  planned for your loved one’s future is to consult with an experienced special needs planning  lawyer. 

Below are the following government benefits available for special needs individuals: 

  • Supplemental Security Income (SSI) – created to ensure that the elderly, blind, and  disabled have a guaranteed minimum monthly income for living expenses. The amount  paid is a combination of federal and state dollars, there is a formula to determine the  awarded amount which depends on what other income is available to the recipient. Though it is administered by the Social Security Administration (SSA), eligibility is  based only on financial need, and, unlike Social Security Retirement Benefits or  Medicare, payments are not dependent on any amount having been paid into the Social  Security system. 
    • In New York State, people who qualify for SSI usually also qualify for Medicaid a  government program which covers many health care costs.
  • Social Security Disability Income (SSDI) – pays benefits to those who are unable to work  according to the very strict Social Security definition of disability. Benefits continue until  the beneficiary is able to work again or reaches retirement age (in which case disability  benefits become retirement benefits). Unlike SSI, you have to have paid into Social  Security payroll taxes to collect the benefit amount depends on the age and number of  accumulated work credits. After two years of receiving SSDI benefits, the beneficiary  automatically becomes eligible to receive Medicare, even if they are less than age 65 in  New York. Certain family members may also qualify for disability benefits, such as  children of a covered worker. We can help you sort through the maze of government  rules to determine what your loved one with a disability is entitled to. 

There are different Special Needs Trusts available in New York State: 

  • Self-Funded Special Needs Trusts: This trust is self-funded with assets owned by the trust  beneficiary. They are commonly required when a disabled individual received a  settlement from a personal injury action or an inheritance. This is also used for divorce  alimony, property division, and child support payments for a child with a disability. 
  • Third-Party Special Needs Trusts: This trust can be created by another person for a  beneficiary. It can be made during an individual’s lifetime or in the event of a death, as  they are generally funded by life insurance. Relatives such as grandparents, siblings,  aunts, uncles, and friends can make gifts to this trust. 
  • Pooled Special Needs Trusts: This trust is also funded with assets owned by the trust  beneficiary. They are established and managed by nonprofit organizations. The assets are  pooled together for investment purposes. However, the nonprofit organization manages a  sub-account for the beneficiary. An individual with disabilities can establish a pooled trust sub-account on their own, which is why this is a common choice for beneficiaries  who have no living relatives or guardians. 

At The Law Offices of Marjory Cajoux, we understand how hard it can be to provide  for a family member with special needs and also how confusing it can be to navigate the process  of protecting assets while preserving their eligibility for government benefits. We have 25 years of experience helping disabled and elderly adults plan for the future and engage in individualized  special needs planning for each client we work with. We are committed to protecting individuals  who are unable to care for themselves and helping families obtain peace of mind through  comprehensive and solution-oriented special needs planning.

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