Caring for Your Special Needs Child: The Special Needs Trust

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• Caring for Your Special Needs Child

The Special Needs Trust
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• The Need for Special Needs Planning

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• Estate planning is important for everyone but
  takes on a heightened importance for parents of a
  special needs child

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Failing to plan could have unintended negative
consequences
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Financial Costs
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The parent of a special needs child may not want
to dwell on the financial aspect of raising the
child but reality is that it costs more
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Raising a special needs child costs more
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Your special needs child will likely be dependent
to some degree forever
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You may want to provide funds in your estate plan
to supplement his/her care
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Benefit Programs
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• There are numerous state and federal benefit
  programs that help with the cost of caring for a
  special needs child or adult

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Entitlement programs do not take recipients
income or resources into account
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Means test programs do consider income and
resources
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Social Security Disability Insurance
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Entitlement program
Known as SSDI
Provides monthly monetary benefit
Eligibility based on parents earnings record
Parent must be collecting retirement or
disability or be deceased
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Medicare
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Federal program
Entitlement program
Provides healthcare
Special needs adult receiving SSDI may qualify
regardless of age
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Medicaid
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Jointly funded by state and federal governments
Administered by states
Means test program
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Provides healthcare
Income and resources considered
Important of special needs individual may need
long-term care because Medicare does not pay for
long-term care
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Supplemental Security Income
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Federal program
Means test program
Provides monthly monetary benefit
Income and resources considered
Prior work history of parent not important
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Supplemental Nutritional Assistance Program
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Known as SNAP
Formerly the Food Stamp program
Means test program
Provides monthly assistance purchasing food
Income and resources considered
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ESTATE PLANNING MISTAKES
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• Estate planning with a special needs child
  requires careful planning and considerations

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There are numerous pitfalls that can derail an
estate plan that is intended to protect a special
needs child
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FAILING TO PLAN
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Without an estate plan the Texas laws of
intestate succession will determine how your
estate is distributed
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Chances are good that your special needs child
will inherit a portion of your estate
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That inheritance could cause your child to lose
his or her eligibility for benefit programs
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DISINHERITING YOUR CHILD
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A parent may completely disinherit a special
needs child in an attempt to ensure that the
child does not lose benefits
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Child may be aware of the disinheritance and feel
unloved
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No provision for providing supplemental
assistance to child in the future
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TRANSFERRING THE INHERITANCE
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Parent may leave a special needs childs
inheritance to siblings
Hope is that the siblings will use the funds to
care for special needs sibling
Assets subject to creditors of siblings as well
as to loss in a divorce
Sibling under no legal obligation to use the
funds as intended
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THE SOLUTION SPECIAL NEEDS TRUST
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Also referred to as Supplemental Needs Trust
Lets you appoint professional trustee to manage
trust funds
Specific language required
Protects trust assets from creditors
Medicaid cannot recover from trust assets after
childs death
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Learn More About Special Needs Trust in Houston
Texas
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The Mendel Law Firm, LP
www.mendellawfirm.com
[phone]