As the parent of a child with special needs, you work hard to provide your child with an exceptional quality of life. That likely entails spending considerable time and resources to ensure that their physical and emotional needs are met.
You want to know that that support will continue if you are not here to provide it. Leaving assets directly to your child, however, could jeopardize much-needed government assistance.
At Stivers Law, our Knoxville special needs planning lawyer can help you incorporate special needs planning into your comprehensive estate plan to make sure your child is protected.
From setting up special needs trusts to planning for their care when you’re no longer around, our team is here to support you through it all. Start planning today.
What is Special Needs Planning?
Special Needs Planning is a customized financial and legal approach that allows you to provide continued financial support to your child with special needs without jeopardizing eligibility for state and federal assistance programs.
For many parents, that means using various legal tools like Special Needs Trust, which protects assets intended for your child’s support and maintenance. This ensures that the money or assets held on behalf of your child are only used to help supplement the assistance your child receives from government programs.
Understanding the Tools: ABLE Accounts and Special Needs Trusts
In special needs planning, two significant legal instruments stand out: ABLE accounts and Special Needs Trusts (SNTs). These tools are indispensable for ensuring the financial security and well-being of individuals with disabilities while safeguarding their eligibility for vital government benefits.
ABLE Accounts
ABLE (Achieving a Better Life Experience) accounts are a game-changer for individuals with disabilities. These tax-advantaged savings accounts are designed to empower them with greater financial independence.
To open an ABLE account, an individual must have a disability that manifested before age 26, with no upper age limit for enrollment. Contributions to ABLE accounts are made with after-tax dollars, but the earnings within the account grow tax-free. Withdrawals used for qualified disability expenses are also tax-exempt.
The funds in an ABLE account can be used for various qualified disability expenses, including education, housing, transportation, healthcare, and more.
Special Needs Trusts (SNTs)
Special Needs Trusts (SNTs) play a crucial role in preserving the financial stability of individuals with disabilities. These trusts are divided into two primary categories: First-party SNTs and Third-party SNTs, with a variation called Pooled Trusts.
- First-party Special Needs Trust: Also known as “self-settled” or “payback” trusts, first-party SNTs are funded with the beneficiary’s assets. They often come into play when individuals with disabilities receive an inheritance, personal injury settlement, or other substantial assets.
- Third-party Special Needs Trust: In contrast, third-party SNTs are established by family members, guardians, or friends for the benefit of an individual with a disability.
- Pooled Trusts: Pooled trusts offer an alternative for families seeking professional management of trust assets. They are typically administered by nonprofit organizations and offer cost-efficiency and individual sub-accounts
Understanding these legal foundations equips families with the knowledge needed to make informed decisions when planning for the future of their loved ones with special needs. Special needs planning, however, extends beyond legal tools and requires a comprehensive approach that begins with a thorough assessment of the individual’s unique needs and circumstances.
To learn more about special needs planning, check out our on-demand special needs planning webinar or contact us today for a consultation.
Why is Special Needs Planning Necessary?
Your special needs child can grow up to live a happy and relatively independent life, thanks in large part to advances in science and medicine that make that possible. Nevertheless, your child may continue to need specialized therapeutic and medical care for life – and that care is costly. If you plan to continue providing financial support when your child reaches adulthood, careful planning is crucial.
Money or other assets gifted to your child will be considered when determining eligibility for state and federal assistance programs such as Medicaid, Supplemental Security Income (SSI), and housing assistance and may cause your child to lose eligibility. Special needs planning focuses on incorporating legal tools and strategies into your overall estate plan so that you can continue to provide financial support without your child losing much-needed benefits.
Estate Planning and Special Needs
Estate planning takes on profound significance in securing the future of individuals with special needs. The primary goal is to provide financial stability, protect eligibility for crucial government benefits, and ensure that your loved one continues to receive the necessary care and support, even after you can no longer provide it. That can be achieved in many ways, like executing guardianship arrangements and a letter of intent.
Guardianship and Conservatorship
When your loved one with special needs is unable to make decisions independently due to cognitive or developmental disabilities, guardianship or conservatorship might be necessary. These legal arrangements grant you the legal authority to make important decisions on their behalf, including financial, healthcare, and personal matters.
Guardianship provides control over personal and healthcare decisions, while conservatorship pertains to financial matters. However, it’s important to note that these measures can be restrictive and should only be pursued when less intrusive options, such as supported decision-making, aren’t feasible.
Letter of Intent
While legal documents provide the framework for managing your loved one’s future, a Letter of Intent (LOI) adds a deeply personal dimension. This document isn’t a legal requirement but is a valuable guide for future caregivers, trustees, and guardians.
You can share insights into your loved one’s preferences, routines, and care instructions in your LOI. It offers a window into their unique personality, likes, and dislikes. By providing this intimate knowledge, you ensure that their quality of life and well-being are determined not solely by legal documents but also by the personal touch and understanding of those responsible for their care.
Empower Your Special Needs Journey with Our Special Needs Planning Lawyers in Knoxville
Special needs planning requires more than good intentions – it demands expertise, precision, and a deep understanding of the legal nuances.
This is where our team of special Needs planning lawyers shines. Here’s why our client’s choose us:
- In-depth knowledge of Complex Laws and Regulations — Our lawyers understand the intricate laws and regulations of special needs planning. They stay up-to-date with evolving legislation to ensure your loved one’s plan is compliant and optimized for maximum benefits while minimizing risks.
- Customized Solutions Tailored to Your Unique Needs — Our lawyers create personalized plans that align with your loved one’s unique circumstances, goals, and aspirations – not cookie-cutter solutions.
- Mitigating Risks with Professional Guidance — Our lawyers shield you from mistakes in special needs planning, protecting government benefits, estate assets, and your loved one’s well-being.
- Meticulous Drafting of Special Needs Trusts and Legal Documents — Our lawyers can draft SNTs to ensure that your loved one’s assets are managed without impacting their eligibility for government programs.
- Ongoing Review and Adaptation — We provide continuous legal support to ensure your special needs plan is always effective and up to date, giving you peace of mind.
At Stivers Law, we are experienced in helping families plan for the care of their loved ones with special needs. Our lawyers are skilled in weaving together a secure future, ensuring your loved one’s needs are met, their benefits are protected, and their dreams have room to flourish.
Don’t leave this crucial journey to chance – empower it with our guidance and secure a brighter tomorrow for your family. Contact us today.
