Special Needs Trusts

Financial-Planning.com published an article by Ed Slott entitled, "When you should establish an IRA as a trust" (May 31, 2017). Provided below is a brief summary of the article published at Financial-Planning.
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Wickedlocal.com published an article by Leanna Hamill entitled, "PLANNING MATTERS: Why you need an Estate Plan" (Feb 7, 2017). Provided below is a brief summary of the article published at Wickedlocal.
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Poughkeepsiejournal.com published an article by Bernard A. Krooks entitled, 

Forbes.com published an article by Mark Eghrari entitled, "6 Reasons to Revise your Estate Plan as Soon as Possible" (Jan 2, 2017). Provided below is a brief summary of the article published at TheTimesHerald.

TheTimesHerald.com published an article by Matthew Wallace entitled, "New Year's Resolution: Plan to Plan" (Jan 2, 2017). Provided below is a brief summary of the article published at TheTimesHerald.
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How should I protect my special needs child in my estate plan?

Sadly, there will always be some children with special needs, whether they are born with congenital defects or develop disabilities through accident or disease. The astonishing increase in the number of cases of autism, the  Zika virus, with its potential for the catastrophic congenital defect of microcephaly, and the discovery of lead in the water of Flint, Michigan have combined to make the general population particularly uneasy about the possibility that one day some member of their own family will have special needs. While distressing to consider, it is a reality for a growing percentage of families. Families of moderate means, as well as those who have substantial estates, should consult with

Anyone who takes care of a relative with special needs has probably laid awake at night worrying about what will become of their loved one after they are gone. It’s hard not to worry, but at the same time you have to remember that worrying is like sitting in a rocking chair - it gives you something to do, but it never gets you anywhere. If you really want to put your mind at ease, and put your worries to rest, it is time to talk to an attorney about setting up a special needs trust to benefit your loved one after you are gone.

As I’m sure you are aware, providing care for someone with special needs can get quite expensive, and most people with special needs rely on government support from programs like Supplemental Security Income (SSI) and Medicaid. When you leave money to someone with special needs outright, that money must often be used up before SSI and Medicaid will kick any funds. Your loved one is then put into a position where they are only being supported by government programs. This is unfortunate because their quality of life is likely to suffer under this arrangement. While government programs provide basic necessities like food, shelter, clothing, and medical care, they don’t provide enriching experiences or special things that let your loved one know someone cares about them.

A special needs trust is a special kind of trust that is designed to allow people with special needs to get the benefit of any funds left to them in addition to the benefits they get from government assistance programs.

The assets in a special needs trust can be used to provide your loved one with things that enhance their quality of life. For example, I have seen trust funds used to buy a trust beneficiary, who happened to be a huge football fan, tickets to a Tampa Bay Buccaneers game as a special birthday treat. Trust funds can also be used to pay for practical things like special medical care or educational programs. 

It is important to note that one of the reasons the trust is able to preserve the beneficiary’s eligibility for benefits is that it is structured so that the funds cannot be distributed directly to the disabled beneficiary. Funds are instead managed by professionals, who then disburse money to third parties who provide goods and services for use and enjoyment by the disabled beneficiary.

Providing your loved one with a better quality of life while they are relying on government assistance is not unethical or fraudulent. In fact, both the federal government and the State of Florida have structured their laws to encourage families to tap into government resources, even when other resources are available, in order to provide a higher quality of life experience.

However, this private-public funding partnership is not automatic. If you want your loved one to have benefits beyond the basic necessities provided by funds left to them, working with an experienced attorney to set up a proper special needs trust is a necessity.

The Americans with Disabilities Act (ADA), signed into law in 1990, recognized the civil rights of a large class of citizens with physical and mental disabilities by making it illegal to discriminate against them in employment, transportation or public services and accommodations. Since its enactment, much progress has been made, enabling people with disabilities to obtain an education, pursue a career, live independent lives and fulfill their dreams. 

Despite this progress, people with disabilities who have children are more likely to have their parental rights terminated or lose custody after a divorce. 

Discrimination in the Courts

These discriminatory actions are often justified on the grounds that the courts are protecting the best interests of the child, but there is little research to support the assumption that someone who is disabled is incapable of being a good parent. In fact, according to advocacy groups there are likely more than 4 million parents with physical disabilities currently raising children. 

Most family courts work diligently to provide services and support to ensure that children maintain contact with their parents whenever possible. This is not always the case when disability is involved. There have been cases where disabled parents have not been allowed to bring their newborns home and the state subsequently filed to have their parental rights revoked, even in the absence of evidence of abuse or maltreatment. The presumption is that the disability endangers the welfare of the child. Currently, two thirds of the states have laws permitting the removal of children based on the disabled status of the parent.

Disadvantage in Custody Cases

Parents with disabilities are also at a disadvantage in custody cases, particularly if the ex-spouse does not have a disability. Competent parents with special disabilities require knowledgeable advocates who can demonstrate that they are able to effectively carry out their parenting duties in their own adaptive ways.

Fighting Discriminatory Practices

Advocates for the legal rights of parents with disabilities are waiting for a landmark trial that halts the discrimination suffered by parents with disabilities and protects their rights to have and raise children. While everyone agrees that children should not be exposed to a hazardous environment, decisions to remove children from homes where a parent is deaf or has a low IQ are often made by individuals who fail to grasp the remarkable capabilities of such parents despite their significant handicaps. More education on disability issues is needed at all levels of the child welfare and family court systems. At the same time, parents with disabilities must have better access to fair legal representation and support services. 

If you are about to begin the estate planning process, you have likely heard the term "funding the trust" thrown around a great deal. What does this mean? And what will happen if you fail to fund the trust?

The phrase, or term, "funding the trust" refers to the process of titling your assets into your revocable living trust. A revocable living trust is a common estate planning document and one which you may choose to incorporate into your own estate planning. Sometimes such a trust may be referred to as a "will substitute" because the dispositive terms of your estate plan will be contained within the trust instead of the will. A revocable living trust will allow you to have your affairs bypass the probate court upon your death, using a revocable living trust will help accomplish that goal.

Upon your death, only assets titled in your name alone will have to pass through the court probate process. Therefore, if you create a trust, and if you take the steps to title all of your assets in the name of the trust, there would be no need for a court probate because no assets would remain in your name. This step is generally referred to as "funding the trust" and is often overlooked. Many people create the trust but yet they fail to take the step of re-titling assets in the trust name. If you do not title your trust assets into the name of the trust, then your estate will still require a court probate.

A proper trust-based estate plan would still include a will that is sometimes referred to as a "pour-over" will. The will acts as a backstop to the trust so that any asset that is in your name upon your death (instead of the trust) will still get into the trust. The will names the trust as the beneficiary. It is not as efficient to do this because your estate will still require a probate, but all assets will then flow into the trust.

Another option: You can also name your trust as beneficiary of life insurance and retirement assets. However, retirement assets are special in that there is an "income" tax issue. Be sure to seek competent tax and legal advice before deciding who to name as beneficiary on those retirement assets.

Jacque Wilson (CNN.com) has recently published an article entitled, “Dying: What no one wants to talk about” (January 12, 2014). Provided below is the abstract to the article from CNN.com:

Dying: What no one wants to talk about

No one likes to think about death; it is a situation that no one wants to be in. Looking at a loved on a hospital bed as the doctors talk about ventilators, feeding tubes, EEG results, etc. and wondering if this is what your loved one would have wanted is a horrible situation to be in. What would you do in a similar situation?

13-year-old Jahi McMath has made many people question what they would do in a situation like this. Doctors declared her brain dead after a tonsillectomy in early December. Although a judge agreed that she was brain dead, her family fought to keep Jahi alive. Do you think this is what Jahi would have wanted? Her family does not know the answer to that question.

A California study found that 84% of those who were surveyed said their loved ones had no idea or knew what their wishes were exactly and only 29% had ever had a serious conversation about end of life care. No matter what your age is right now you do not know what can happen to you and therefore talking to loved ones about end of life care should be an important conversation to have sooner than latter.

Find out the five things you need to do now by continuing to read more about this article “Dying: What no one wants to talk about” by Jacque Wilson.

When you are a child, your parents serve as your decision makers. They have ultimate say in where you go to school, what extracurricular activities you partake in and where, and how you should be treated in the event of a medical emergency. While most parents continue to play a huge role in their children’s lives long after they reach adulthood, they lose legal decision-making authority on that 18th birthday. Most young adults don't contemplate who can act on their behalf once this transfer of power occurs, and consequently they fail to prepare advance directives.

In the event of a medical emergency, if a young adult is conscious and competent to make decisions, the doctors will ask the patient about his or her preferred course of treatment. Even if the individual is unable to speak, he or she may still be able to communicate by using hand signals or even blinking one’s eyes in response to questions.

But what happens in instances where the young adult is incapacitated and unable to make decisions? Who will decide on the best course of treatment? Without advance directives, the answer to this question can be unclear, often causing the family of the incapacitated person emotional stress and financial hardship.

In instances of life threatening injury or an illness that requires immediate care, the doctors will likely do all they can to treat the patient as aggressively as possible, relying on the standards of care to decide on the best course of treatment. However, if there is no "urgent" need to treat they will look to someone else who has authority to make those decisions on behalf of the young individual. Most states have specific statutes that list who has priority to make decisions on behalf of an incapacitated individual, when there are no advance directives in place. Many states favor a spouse, adult children, and parents in a list of priority. Doctors will generally try to get in touch with the patient’s "next of kin" to provide the direction necessary for treatment.

A number of recent high-profile court cases remind us of the dangers of relying on state statues to determine who has the authority to make healthcare decisions on behalf of the ill. What happens if the parents of the incapacitated disagree on the best course of treatment? Or what happens if the patient is estranged from her spouse but technically still married- will he have ultimate say? For most, the thought is unsettling.

To avoid the unknown, it’s highly recommended that all adults, regardless of age, work with an estate planning attorney to prepare advance directives including a health care power of attorney (or health care proxy) as well as a living will which outline their wishes and ensure compliance with all applicable state statutes.