Supplemental Needs Trust Attorney:
Providing for Family Members with Special Needs

When searching for a trustworthy special needs attorney, Florida residents can rely on the team at Walser & Herman Law Firm. Our firm has more than 30 years of experience in planning for families with special needs individuals, and an experienced lawyer at our firm can help you understand how to provide for such disabilities of family members or loved ones in your estate planning so that your generosity actually benefits your loved one, without impairing his or her ability to receive other forms of support.

Florida Estate Planning Lawyer: Provide for Family Members with Special Needs

If you have a disabled dependent like a child with special needs or a family member in a nursing home, you, of course, want to provide for that person. But if you are thinking of leaving the person a lump sum, you should reconsider. Your generous gift could render your loved one ineligible for government benefits he or she would otherwise be entitled to, like SSI or Medicaid.

Generally speaking, a Special Needs Trust (also known as a Supplemental Needs Trust) is a better option. A Special Needs Trust is designed so that the trustee can provide life-enhancing services the government does not ordinarily cover. These services may include special wheelchairs or other equipment, therapies, medical second opinions, travel expenses, extra personal nursing care, extra services or expenses required to maintain his or her standard of living, etc.

Special Needs Planning

The assets in the trust are not available to the beneficiary for the asking, but are totally discretionary. Therefore, the assets are excluded by the government when it evaluates your loved one’s eligibility for benefits.

A special needs trust is a trust designed for beneficiaries who are disabled, either physically or mentally. It is written so the beneficiary can enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits. In addition to the public benefits preservation reasons for such a trust, there will be administrative advantages of using a trust to hold and manage property intended for the benefit of the beneficiary if the beneficiary lacks the legal capacity to handle his or her own financial affairs.

Special needs trusts can provide benefits to, and protect the assets of, the physically disabled or with mental illness. Special Needs Trusts are frequently used to receive an inheritance, or personal injury settlement proceeds on behalf of a disabled person or are funded from the proceeds of compensation for criminal injuries, litigation, or insurance settlements.

Searching for a special needs trust attorney near Palm Beach? We can help you with all types of special needs trusts.

Disability Trusts (First Party SNT)

These trusts are also referred to as (d)(4)(A) trusts, which alludes to where they can be found in the Federal statute that authorizes them. Due to common usage, this is usually the type of trust most people are referring to when they use the term “special needs trust.” To establish a valid Disability Trust, it must satisfy the following legal requirements.

The trust must be irrevocable and established for the sole benefit of the trust beneficiary by the beneficiary’s parent, grandparent, legal guardian, or the Court. The beneficiary must be under 65. Any assets in the trust must belong to the beneficiary. Disability Trusts require a payback provision. At the death of the beneficiary, any remaining funds must be used to reimburse the State for medical benefits provided over the individual’s lifetime.

Third-Party Special Needs Trusts

A third-party SNT is funded with assets belonging to a person other than the beneficiary. In fact, no funds belonging to the beneficiary may be used to fund the trust. Typical funding comes from gifts, an inheritance from parents, grandparents or family members, and proceeds of life insurance policies. Unlike a first-party SNT, this trust has no provision to pay back Medicaid upon the trust’s termination; rather, the person creating the trust decides how the trust estate is distributed when the beneficiary dies.

Third-party SNTs may be established inter vivos, i.e., during the Settlor’s life, or as part of the Settlor’s estate plan, e.g., under a Will or a Revocable Living Trust. The beneficiary of a third-party SNT does not have the legal authority to revoke or terminate the SNT, or to direct the use of the SNT assets for his or her own support and maintenance, therefore the SNT assets are not countable assets for government benefit purposes.

Pooled Special Needs Trusts

A pooled special needs trust is a big “master” special needs trust with many sub accounts, one for each disabled person who enrolls in the pooled trust. By “pooling” together these subaccounts, enrollees benefit from the economies of scale. Pooled trusts can accept accounts of any size. Pursuant to federal law, pooled trusts must be administered by a not-for-profit association.nomies of scale. Pooled trusts can accept accounts of any size. Pursuant to federal law, pooled trusts must be administered by a not-for-profit association.

Differences Between an Individual Special Needs Trust and a Pooled Special Needs Trust

An individual special needs trust is a trust created for the sole benefit of one disabled person. Individual special needs trusts that accept deposits of the disabled person’s own funds are called “first-party” trusts. Pooled special needs trusts must be administered by a not-for-profit trustee and are created for many disabled persons at once. With first-party individual special needs trusts, the government must be repaid any monies remaining in the trust upon the death of the disabled individual. With pooled special needs trusts, the government also may be repaid but only to the extent not retained by the pooled trust itself. Congress created this rule so that the not-for-profits could retain the funds to further their not-for-profit purpose of assisting the disabled. The pooled special needs trust allows the monies to benefit disabled persons during their lifetimes and for any remaining monies to be available to fulfill the not-for-profit’s mission.

Leaving Money To Others Can Create Serious Problems

“Disinheritance” was commonly used before the use of Special Needs Trusts was officially recognized by Congress.

Disinheritance as a means of providing for a disabled or ill person puts the assets at risk. A non-disabled sibling holding assets for the benefit of a disabled sibling could be subject to such liabilities such as judgments from automobile accidents, a bankruptcy, or a divorce.

In such circumstances, the assets meant to benefit the disabled or chronically ill person could go to pay the judgment creditors or the estranged spouse of the non-disabled sibling. Using a Special Needs Trust guarantees that the funds will be held only for the benefit of the person under the disability or chronic illness, and not for any other purpose whatsoever.

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Memorandum of Intent

No one else knows your child as well as you do, and no one ever could. You’re a walking encyclopedia of his or her habits, needs, and wishes. When your child has special needs, though, there’s an additional chapter, detailing medical, behavioral, and educational requirements.

So what happens if you suddenly aren’t there? First and foremost, you should name a guardian, but a memorandum of intent will be crucial in helping that individual (or Successor Trustee of an SNT) minimize disruption and disorientation for your loved one. A skilled Florida estate planning attorney will advise that this memorandum should include a description of your child’s disabilities and medical history, including all medications and dietary needs. List key contacts, educational details, and his or her schedule of therapy and other services—all the instructions necessary for day-to-day life.

The memorandum of intent should detail family history, capturing those little things that only close relatives understand: daily schedule, favorite activities, things he or she loves or hates, living arrangements that work or don’t…there’s no detail too small to ease the transition.

Because levels of disability vary, and because many people fail to recognize that, it’s important to include a list of daily activities. The ability to contribute to family life builds self-esteem, so if your child can help with the dishes, put it in the memorandum. If he or she loves to clear the table, mention that. If folding clothes frustrates him or her, it’s important that future caretakers have this information upfront.

Does your adult child have a job? Does he or she want one? What type of work can he or she be successful at? Is college an option? How did you plan to pay for it? These are all questions that emerge eventually in the life of a person with special needs, and although you certainly plan to be there to help answer them, it’s important that you address them beforehand, for your child’s sake.

Create Your Special Needs Planning

Walser & Herman Law Firm helps you create an effective long-term care plan. Call our Boca Raton main office or our Palm Beach office location at 561.750.1040 or email us to schedule an appointment with our estate and care planning lawyers.

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Our Team

Our experienced team of attorneys is here to help you navigate your estate plan and the Florida probate process.

Thomas C. Walser, JD, LLM
Partner/Attorney
Christa W. Herman, Esq.
Partner/Attorney
Jay L. Kauffman, Esq.
Of Counsel
Bettee M. Collister, Esq.
Of Counsel