Special Needs Planning

Disability benefits are provided by the state and federal governments to assist persons unable to earn a living because of a physical or mental disability. These programs include Supplemental Security Income (SSI), COPES, Medicaid, and medical coupons. Each program has strict requirements as to the amount of resources a person can have available to them and still receive disability benefits. Note: Medicare and Social Security Disability do not have financial eligibility requirements. Rather than be removed from a disability benefits program, there are planning options available involving trusts set up for the specific needs of the disabled person.

Q I receive Social Security Supplemental Income (SSI), and my father has left me an inheritance in his Will. Do I need to discontinue my disability benefits until the inheritance is depleted?
A Usually, payments from an inheritance, a lump sum payment from Social Security, or a large IRS refund would make a person ineligible for continued benefits under the SSI program. But, a trust option is available using monies of a disabled person. This type of trust must be set up by a parent, grandparent, court or guardian. It allows the monies to be spent on behalf of the disabled person for special needs, but when the disabled person dies, any monies remaining must be paid back to the state for some of the services it provided.

Q What if a person receiving disability benefits is injured and is to receive monies from the personcausing the injuries?
A A trust very similar to the one in the preceding answer can be set up. Care must be taken to do it carefully.

Q My parents and grandparents are deceased, and I don’t have a guardian. How difficult is it to have the court set up a trust?
ANot difficult at all. A proposed trust is drafted for the court’s review, and a petition is presented asking the court’s approval of the trust.

Q My sister has always helped me with my finances and major decision making. Can she be the Trustee of my Special Person Care Trust, or does the court decide who to appoint as Trustee?
A You can certainly chose who you would like to be your trustee. The court will require that person to be bondable. It is in your best interest to chose someone who has experience with managing money. Depending on the amount of funds in the trust, you may decide a professional trustee should manage your trust.

Q What kind of special needs can be provided?

A Usually, things such as health insurance premiums, dental care, unreimbursable medical expenses (for which there are no private or public funds available), supplemental nursing care, rehabilitation services, the excess cost of a private room over a shared room, psychological therapy, social support services, private case management, companion care, telephone, television, reading materials, recreation, exercise, personal grooming, subscriptions, flowers, pets and pet care, legal services, spiritual needs, advocacy, education, repair and replacement of lost or broken items, computer services, stamps and writing supplies, music, some equipment, and cultural experiences can be provided.

Q These ideas sound great. What are the disadvantages?

A The benefits are very exciting. The disadvantages are some initial costs, increased record keeping, and restriction on how your money is used. Many people feel the benefits far outweigh the disadvantages.

Q What else do I need to know?

A If you are on one of these programs and a relative is likely to leave you an inheritance, they can include special trust provisions in a Will.