The importance of special needs planning for individuals with disabilities and the need for a well-structured plan that caters to their special needs.
The key components of a comprehensive special needs plan.
The difference between special needs planning and traditional estate planning.
What Is Special Needs Planning, And Why Is It Important For Individuals With A Disability?
Special needs planning is a crucial process for individuals who may not always be able to plan for themselves. Its complexity comes from the unpredictability surrounding special needs and the ever-changing landscape of law and medicine.
However, amidst this complexity, a well-structured plan can provide a sense of security. The inclusion of special needs planning within an estate plan, for example, is not an option but a necessity. With advancements in medicine, a condition considered a special need today might have a cure tomorrow, further emphasizing the importance of developing a life plan that caters to these special needs.
What Are The Key Components Of A Comprehensive Special Needs Plan?
A comprehensive special needs plan typically consists of six critical steps:
Estate planning: Start by excluding the individual with special needs from all assets in the estate. This prevents them from directly inheriting property, which could potentially jeopardize their eligibility for certain need-based government benefits.
Determining eligibility: Maximize the person’s eligibility for needs-based government benefits. This helps to ensure they have access to all the assistance they may require.
Setting up a special needs trust: This maintains their quality of life or keeps them eligible for government benefits. A special needs trust may be a third-party special needs trust or a first-party special needs trust if the individual already has assets in their name.
Writing a letter of intent: While not a legal document, this letter serves as instructions to future guardians or caretakers. It outlines the individual’s likes, care routines, and needs. This step is vital to ensure continuity in the quality of care provided to the individual.
Determining guardianship: Assess whether guardianship is appropriate once the individual reaches the age of majority. If the individual is not able to make legal decisions, a parent or guardian needs to get court-appointed guardianship, or limited conservatorship in certain jurisdictions.
Family communication: The final, and arguably the most critical step, involves informing your family about the plan. Even the best plans may not be effective if no one knows about them. Ensuring that your family members are aware of and understand the plan is crucial for its successful execution.
These steps form a roadmap for creating a comprehensive special needs plan, fostering a secure future for individuals with special needs, and offering peace of mind for their families.
How Does Special Needs Planning Differ From Traditional Estate Planning?
The primary distinction between special needs planning and traditional estate planning lies in the area of benefit eligibility. Traditional estate planning does not typically consider the implications of asset ownership on eligibility for government benefits. In contrast, special needs planning must factor this in due to the potential eligibility of the individual with special needs for such benefits.
The main benefits to consider are the Supplemental Security Income (SSI), a federal program, and Medicaid (referred to as AHCCCS or ‘access’ in Arizona). Both these programs’ eligibility criteria are based on the assets or income the individual possesses. For special needs planning, ensuring eligibility for these benefits is a crucial aspect of the process.
How Can We Ensure Our Special Needs Child Will Be Taken Care Of When We Die?
To ensure the well-being of your special needs child after your passing, adhere to the following key steps:
Draft a comprehensive letter of intent: This document should detail all the preferences, routines, and needs of your child.
Nominate a guardian in your will: The chosen individual will take over your duties when you can no longer fulfill them.
Set up and fund a third-party special needs trust: This is a legal structure that holds and manages assets for the benefit of your child without jeopardizing their government benefits eligibility.
Detail living arrangements: Specify in your letter of intent where you anticipate your child to reside.
Appoint a competent trustee: This person should have the expertise to manage a special needs trust, which includes tasks such as paying rent supplemental to what the SSI provides.
Select the appropriate fiduciary figures: This can include a trustworthy relative or a professional, even if it costs the trust money.
Through careful planning and selecting the right individuals for fiduciary roles, you can ensure that your child is well-cared for after you are no longer able to do so yourself. It’s crucial to evaluate the suitability of these individuals critically, as an unsuitable trustee can affect the effective execution of your plan. For more information on Special Needs Planning In Arizona State, an initial consultation is your next best step.
