Disabilities and Special Needs
If assets are left directly to a disabled beneficiary, they could disqualify him from state or federal programs under which he is receiving benefits. In 1993 Congress enacted new laws that entitled disabled individuals to derive the same estate planning benefits as non-disabled individuals without affecting their eligibility for state or federal benefits. The law made provision for Supplemental Needs Trusts, which enable you to leave any amount of money to a loved one who has special needs without affecting her eligibility for the state or federal benefits she receives.
The law further provides the trust proceeds must be used to provide luxuries for the disabled individual he would not otherwise receive under the state and federal programs. Luxuries can include vacations, computers, power wheel chairs, prosthetics, and other comforts not generally provided by the government.
A Supplemental Needs Trust can be created by a disabled individual with his own funds or be created by someone other than the disabled individual, typically a parent or relative.
There are different rights and restrictions to any trust, but they ensure immediate qualification for federal and state benefits (i.e. Medicaid) and provide luxuries to the disabled beneficiary she otherwise, most likely, would be unable to have.
When Do I Need Guardianship for my Special Needs Child?
As a parent of a special needs child, you are the child's “natural guardian” and can make all decisions regarding the child. However, your rights as guardian do not allow you to have access or control of your child's assets (i.e., proceeds from a lawsuit or gifts from a family member). In addition, when your child reaches the age of 18, you lose your rights as the natural guardian to make healthcare and other life decisions for them. To maintain these rights, you must have a power of attorney or commence a guardianship proceeding; otherwise, the State will assume legal authority over your disabled loved one. To avoid losing your authority, you should contact a qualified attorney to begin a guardianship proceeding at least six months prior to your child's 18th birthday.