planning for a loved one with special needs presented by donald d. vanarelli, esq. certified elder...
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Planning for a Loved OnePlanning for a Loved One With Special Needs With Special Needs
Presented ByPresented ByDonald D. Vanarelli, Esq.Donald D. Vanarelli, Esq.
Certified Elder Law Attorney Certified Elder Law AttorneyCharter Member, Academy of Special Needs PlannersCharter Member, Academy of Special Needs Planners
2007-2008 NJ “Super Lawyer” 2007-2008 NJ “Super Lawyer”
What Does Planning Involve? What Does Planning Involve?
Preserving your child’s financial security Preserving your child’s financial security and quality of lifeand quality of life
Addressing key issues:Addressing key issues:Understanding the role of public benefitsUnderstanding the role of public benefits
Making decisions about the futureMaking decisions about the future
Using estate planning/trusts to protect assetsUsing estate planning/trusts to protect assets
Part 1:Part 1:Understanding Public BenefitsUnderstanding Public Benefits
Public Benefits at a GlancePublic Benefits at a GlanceFinancial BenefitsFinancial Benefits
Supplemental Security Income (SSI)Supplemental Security Income (SSI)
Social Security (SS)Social Security (SS)&&
Social Security Disability Insurance Social Security Disability Insurance (SSDI)(SSDI)
Not means tested but subject to work credits Not means tested but subject to work credits or parents’ eligibilityor parents’ eligibility
Means tested: Limited income and assetsMeans tested: Limited income and assets
Public Benefits at a GlancePublic Benefits at a GlanceMedical BenefitsMedical Benefits
MedicaidMedicaid Automatic with SSIAutomatic with SSI
Must apply for SS/SSDIMust apply for SS/SSDI
MedicareMedicare After two years of SSDIAfter two years of SSDI
Supplemental Security Income Supplemental Security Income (SSI)(SSI)
Must meet SSA’s definition of “disability” Must meet SSA’s definition of “disability” and have limited assets/incomeand have limited assets/income
Provides monthly income for food/shelterProvides monthly income for food/shelter
Gateway to Medicaid / in-home support Gateway to Medicaid / in-home support servicesservices
Social Security (SS) / Social Security Social Security (SS) / Social Security Disability Insurance (SSDI)Disability Insurance (SSDI)
Social Security for individuals:Social Security for individuals:Disabled before age 22 andDisabled before age 22 andWith parents eligible based on their work record who With parents eligible based on their work record who
are retired, disabled or deceasedare retired, disabled or deceased
SSDI for individuals with work recordSSDI for individuals with work record
Social Security benefits may reduce or Social Security benefits may reduce or eliminate SSI benefitseliminate SSI benefits
Medical Assistance & SupportMedical Assistance & Support
Medicaid:Medicaid:SSI recipients receive automaticallySSI recipients receive automaticallyCovers “medically necessary” services, equipment, Covers “medically necessary” services, equipment,
hospitalization hospitalization In-home services needed to live at home: personal In-home services needed to live at home: personal
care, housekeeping, cooking, transportation to care, housekeeping, cooking, transportation to doctorsdoctors
Medicare:Medicare:Medical coverage, including doctors, hospital, skilled Medical coverage, including doctors, hospital, skilled
carecare
How Benefits Work TogetherHow Benefits Work Together
SSISSI MedicaidMedicaid
SSDISSDI MedicareMedicare
Part 2:Part 2:Making Decisions About the FutureMaking Decisions About the Future
Case Study: NathanCase Study: Nathan
Current situation:Current situation:
18-year-old with autism18-year-old with autism
Lives with momLives with mom
Income from work programs, SSI, Social Income from work programs, SSI, Social Security (from dad who is deceased)Security (from dad who is deceased)
Limited personal assets (clothing, tv)Limited personal assets (clothing, tv)
Qualifies for MedicaidQualifies for Medicaid
Case Study: NathanCase Study: Nathan
Future situation:Future situation:
Who will make health care decisions?Who will make health care decisions?
Who will make financial decisions?Who will make financial decisions?
Where will he live?Where will he live?
How will his medical expenses be paid?How will his medical expenses be paid?
What Plan Could What Plan Could Nathan’s Mom Make?Nathan’s Mom Make?
Possible Options:Possible Options:
Make no decisions/plansMake no decisions/plans
Leave money to NathanLeave money to Nathan
Disinherit NathanDisinherit Nathan
Leave money to a future caregiverLeave money to a future caregiver
Establish third-party SNT for NathanEstablish third-party SNT for Nathan
Establish first-party SNT for NathanEstablish first-party SNT for Nathan
Part 3:Part 3:Creating an Effective PlanCreating an Effective Plan
for Your Childfor Your Child
What Steps Should You Take Today?What Steps Should You Take Today? Step 1: Envision Your Child’s Future Step 1: Envision Your Child’s Future
Planning ahead makes a difference:Planning ahead makes a difference: Where and with whom will your child live?Where and with whom will your child live? What type/level of care will be required?What type/level of care will be required? Will a guardian/conservator be necessary?Will a guardian/conservator be necessary? Who else will be involved? Who else will be involved? What kind of lifestyle is desired?What kind of lifestyle is desired? What unforeseen challenges could arise?What unforeseen challenges could arise?
Lays out goals/expectations:Lays out goals/expectations: Details preferences, needs, wishes, both medical Details preferences, needs, wishes, both medical
and personaland personal Lists key people in child’s lifeLists key people in child’s life
Helps guide:Helps guide: Family membersFamily members TrusteesTrustees CaregiversCaregivers OthersOthers
What Steps Should You Take Today? Step 2: Create a Memorandum of Intent
Monthly income: Monthly income: SSI, SSDI, Social Security, earned/unearned incomeSSI, SSDI, Social Security, earned/unearned income
Monthly living expenses:Monthly living expenses: Housing, food, transportation, medical, recreation, etc.Housing, food, transportation, medical, recreation, etc.
Consider how any shortfall will be metConsider how any shortfall will be met
What Steps Should You Take Today? Step 3: Estimate Income & Expenses
Income - Expenses = ShortfallIncome - Expenses = Shortfall
Provides supplemental funds for living Provides supplemental funds for living expenses not covered by other income expenses not covered by other income sourcessources
May be established by parents:May be established by parents:Through willThrough willThrough living trustThrough living trust
““Living” SNT lets others contributeLiving” SNT lets others contribute
Trustee has discretion over distributionsTrustee has discretion over distributions
What Steps Should You Take Today? Step 4: Utilize a Third-Party SNT
The SNT Trustee ResponsibilitiesThe SNT Trustee Responsibilities
What are the trustee’s responsibilities?What are the trustee’s responsibilities? Invests/manages assetsInvests/manages assets
Distributes fundsDistributes funds
Keeps booksKeeps books
Files tax returnsFiles tax returns
Hires advocates and care managers, etc., as neededHires advocates and care managers, etc., as needed
Selecting an SNT TrusteeSelecting an SNT Trustee
Who should be the trustee?Who should be the trustee?
Parent Parent withwith professional co-trustee professional co-trustee
Corporate or other professional trusteeCorporate or other professional trustee
Successor trusteeSuccessor trustee
What Parents Should Do What Parents Should Do
Create Memorandum of IntentCreate Memorandum of Intent
Calculate future financial needCalculate future financial need
Establish SNT through will or living trustEstablish SNT through will or living trust
Fund SNT with life insuranceFund SNT with life insurance
Name SNT as beneficiary of accounts, Name SNT as beneficiary of accounts, plans, etc.plans, etc.
Reduce taxable estateReduce taxable estate
What Your Child Should DoWhat Your Child Should Do
Sign Advance Directives, if legal capacity Sign Advance Directives, if legal capacity
Have a legal guardian appointed:Have a legal guardian appointed:When child without mental capacity becomes an adult When child without mental capacity becomes an adult
and parents want to maintain legal responsibilityand parents want to maintain legal responsibility
Court appoints legal guardianCourt appoints legal guardian
What If Your Child Has Assets?What If Your Child Has Assets?
Establish a First-Party SNT:Establish a First-Party SNT:
Provides funds for living expenses not Provides funds for living expenses not covered by other income sourcescovered by other income sources
Maintains eligibility for public benefitsMaintains eligibility for public benefits
Must be established by parent, Must be established by parent, grandparent, legal guardian or the courtgrandparent, legal guardian or the court
State must be reimbursed from the trust State must be reimbursed from the trust for all Medicaid expensesfor all Medicaid expenses
Get Started TodayGet Started Today
Understand your child’s eligibility for public Understand your child’s eligibility for public benefits.benefits.
Make plans for the future to maximize public and Make plans for the future to maximize public and private resources for your child’s benefit.private resources for your child’s benefit.
Make the SNT a key part of your estate plan.Make the SNT a key part of your estate plan.
Contact a special needs attorney for the Contact a special needs attorney for the assistance you need.assistance you need.
Donald D. Vanarelli, Esq.Donald D. Vanarelli, Esq.
Certified Elder Law Attorney Certified Elder Law Attorney
Charter Member, Academy of Special Needs PlannersCharter Member, Academy of Special Needs Planners
2007-2008 NJ “Super Lawyer”2007-2008 NJ “Super Lawyer”