Estate planning also involves not just passing your assets to the next generation, but your values as well. Whether it be through charitable gifts, expressing your wishes for end of life decisions, or special planning to protect disabled family members, a carefully drafted estate plan will ensure that your wishes are fulfilled.
If a family is planning for a child with special needs, whether an adult or a minor, it is imperative to be cognizant of the benefits available to the disabled family member, and how those benefits will be impacted by an inheritance. Some of the most commonly accessed benefits are:
Social Security Disability Insurance (SSDI):
SSDI supports individuals who are disabled and have a qualifying work history, either through their own employment or a family member (spouse/parent).
Supplemental Security Income (SSI):
SSI provides minimum basic financial assistance to older adults (65+), and persons with disabilities (regardless of age), who also have very limited income and resources. Social Security has its own definition of disabled (relates to anticipated length of disability, and ability to perform work).
Medicaid provides health insurance. If you qualify for SSI, you typically automatically qualify for Medicaid.
Division for Developmental Disabilities (“DDD”) Services:
DDD provides services to individuals who have reached the age of 21, and meet the eligibility criteria, which require that an applicant: be a New Jersey resident, be Medicaid eligible, and meet the functional criteria of having a developmental disability. In order to establish this last factor, an applicant must document that he or she has a chronic physical and/or intellectual impairment that: manifested before age 22, is lifelong, and substantially limits the individual in at least three of the following life activities: self-care; learning; mobility; communication; self-direction; economic self- sufficiency; and the ability to live independently.
SSI, Medicaid, and DDD Services are all “means tested,” and require that an applicant fall below the income and asset thresholds set by the federal government. Those thresholds must be maintained while receiving benefits, as well; even a small bequest left directly to a disabled person can disqualify them from benefits they are already receiving. In order to protect a disabled person’s inheritance, family members may direct that person’s bequest (whether specific or residual) into a special needs trust (“SNT”). A SNT is a trust is drafted to direct that the funds in the trust be used to supplement, not supplant, any funds or services the person with special needs may receive from government programs. Thus, the funds in the SNT can be used to pay for things that their benefits do not provide, such as technology and travel.
If you wish for your estate plan to provide for someone with special needs, be sure to speak with a knowledgeable attorney to protect that family member’s eligibility for the services he or she will need as an adult. Often, well-meaning parents and relatives can actually hurt their children by leaving them money directly, thereby disqualifying them from government benefits and services. If your child has assets of his or her own, there are ways to protect them too. It is essential that this type of estate planning is done by a special needs lawyer who understands the challenges faced by families with special needs children, and can help ensure that you are doing everything you can to protect your assets and pass them down to the next generation, minimizing confusion and red tape.
If you have questions about your current estate plan, or would like assistance drafting a new one, please contact Manes & Weinberg, LLC, to discuss your family’s needs and options. (973) 376-7733 firstname.lastname@example.org www.manesweinberg.com
ABOUT THE AUTHOR:
Beth C. Manes, Esq., is a founding member of Manes & Weinberg, Special Needs Lawyers of New Jersey, LLC. She is licensed to practice law in New Jersey, where she has been practicing for over 25 years. Her practice concentrates in Special Education Law, Special Needs Planning, Guardianships and Estate Planning. Beth is also active in her community, raising puppies for the Seeing Eye of Morristown, and serving as a member of her synagogue’s Accessibility and Inclusion Task Force. Beth resides in Essex County with her husband, several dogs, and whichever adult children are home at the time. Beth loves to travel; her favorite vacations are on a bicycle, in a tent, or observing animals not typically found in New Jersey. Beth started her career in corporate law but did not like the impersonal nature of the practice and decided to change direction. After a few more turns in her career path, Beth searched for the field of law where she could have the most impact and discovered a love for special needs advocacy and planning.
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