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Tag: special needs trust

  • The Special Needs Planning Lesson We Learned From Aretha Franklin’s Estate Battle

    The Special Needs Planning Lesson We Learned From Aretha Franklin’s Estate Battle

    You may have noticed the recent lawsuit between Aretha Franklin’s children to settle her estate, but did you catch the special needs planning element?  

    Aretha Franklin wowed America and the world as the Queen of Soul, but Aretha didn’t wow us with her estate planning. She left two handwritten wills, and the one a jury ruled valid was found stuffed between her couch cushions.

    To settle a dispute over the two wills, two of her sons went to court against a third, and while the two may have declared victory, it’s hard to feel that anyone truly won. An estate initially estimated to be valued at $80 million was whittled down to $4 million by the time the case was concluded, and while some funds were lost unnecessarily to taxes, a large portion was lost to the lawsuit itself.

    But here’s the special needs planning element you may have missed: A fourth son lives in assisted living under a court guardianship, and his guardian settled with the other three brothers out of court.

    While Aretha’s huge estate will be able to support her son with special needs, most parents won’t have a multi-million dollar estate waiting for their children at their deaths. Most parents of children with special needs need to provide financially for their child while being careful not to disqualify them from much-needed government support programs like Medicaid and SSI. Making sure there is a financial plan for your child with special needs is essential in order to supplement the benefits that child can receive from government programs.

    Balancing Support with Program Eligibility

    The goal of special needs planning is to provide continuous, consistent support for an individual with special needs across their lifetime. Aretha earned the money to provide care for her son without the need for careful planning, but most families need to maximize government benefits such as Supplemental Security Income (“SSI”) and Medicaid to care for a child with special needs and provide for the needs not met by government programs.

    Parents who earn Social Security retirement benefits will be able to provide some of that benefit amount to their child with special needs when they pass away, and a child with a disability can work a limited amount, earn his own Social Security benefits, and eventually qualify for Medicare. Many individuals with special needs, however, receive services through Medicaid which Medicare won’t provide such as job coaching, community integration, and day or residential services. 

    But even with these benefits, nobody can live on the maximum SSI payment of $914 per month, and Medicaid eligibility requires individuals to have under $2,000 in assets (with a few exceptions) to qualify. Because of this, parents of children with special needs must find a way to provide financially for their child while being careful not to disqualify their child from these government programs. 

    Careful Planning Preserves Your Assets for The Entire Family

    To preserve your child’s eligibility for government benefits, the money you leave for the care of a child with special needs cannot go to that child directly. Instead, you must direct any gifts or inheritances into special planning vehicles such as a special needs trust for your child’s benefit.

    If you establish this trust during your lifetime, the assets can be used to supplement government benefits throughout your child’s life and any remaining funds are then passed on to other family members when the child with a disability passes away. But if the special needs trust is set up after your death – in the absence of planning – any remaining funds in the trust must be used first to repay the state Medicaid agency that provided the child’s lifetime of care. 

    While Aretha’s son may end up with a special needs trust established by a court, the rest of the family will never see those funds again because the trust was established after Aretha’s death. By law, government programs are entitled to be paid back for the assistance they provide to people with disabilities out of that person’s leftover estate. At Aretha’s death, the inheritance she left her son became part of his estate, so it’s now subject to pay-back collections for his government assistance when he dies.

    If Aretha had created a special needs trust while she was living, the funds in the trust would still be considered part of Aretha’s estate, even after her death. Her son would have been provided for through this trust but his brothers would then inherit the remaining funds when the son with disabilities passes away. 

    Applying these rules to the Franklin family has its limits. The son under a guardianship may be able to afford a lifetime of private pay – if the taxes and lawsuit didn’t diminish his share too greatly. But even Medicaid care rates for an individual with special needs can range from $50,000 to $350,000 per year – not an amount most families can afford.

    This son may not have children of his own who would benefit from receiving any remaining funds after his lifetime, but many individuals with special needs have children for whom these funds could be meaningful. Likewise, siblings and other family members often devote countless unpaid hours to provide support for their loved one with special needs, sometimes at the expense of their own careers and families. Receiving some inheritance after years of caregiving can help alleviate the financial sacrifices these family members made.

    Helping You Protect Your Child and Their Inheritance with Heart-Centered Guidance 

    It’s my mission to help your family live their best life today and plan for the best possible care for your loved ones tomorrow. Whether you have a child with special needs or an adult loved one who develops a disability ten years from now, I can help your family plan for these situations and more while keeping your family out of court and conflict and preserving family wealth.  

    The first step is to go through our unique planning process called a Family Wealth Planning Session to choose the right plan for you, your kids, and everyone you love. During the session, I get to know your family’s unique needs and dynamics as well as your assets. I’ll share how the law would apply to your situation and exactly what would happen to your assets and your loved ones if something happened to you right now.

    Next, we’ll work together to choose the right plan for you based on the specifics of your family situation and the budget you’re comfortable with. Once this foundational estate plan is created, we’ll review what extra tools may be right for your family or loved one with special needs to ensure they’re cared for and protected no matter what happens.

    While Aretha Franklin missed the opportunity to save her family millions of dollars by using special needs planning tools, your own estate planning and special needs planning can preserve your family’s wealth and ensure a lifetime of care for everyone you love.

    To get started, call me at (650) 600-1735 to learn more about my unique process and how I can help you and your child with special needs live your best lives.

    This article is a service of Jeannette Marsala, Personal Family Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you’ll get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

  • Estate Planning For a Child With Special Needs: Three Tools You Need to Know

    Estate Planning For a Child With Special Needs: Three Tools You Need to Know

    As a parent of a child with special needs, you’re well aware of the unique challenges that come with caring for your child’s care. You’re an expert on their preferences, routines, skills, and challenges. However, when it comes to securing their future, legal planning can seem overwhelming. You may wonder what tools are the right ones to ensure your child’s unique needs are always met.

    The good news is that there are a number of estate planning tools available to help you protect your child’s interests and provide for their needs, both now and in the future. Even better, these tools can be customized to suit the level of care your child requires, regardless of their level of independence or functioning. Here are three essential tools that every parent of a child with special needs should consider.

    01 | Ensuring A Lifetime Of Care Through Guardianship

    Without proper legal planning, you lose the ability to make decisions for your child when he or she turns 18. Guardianship is a legal relationship ordered by a court that gives someone the authority to make decisions for their adult child if they aren’t able to do so for themselves. With court guardianship, you can name yourself or someone you trust to have the authority to make decisions about your child’s medical care, education, living arrangements, and more. 

    Guardianship is a crucial tool for parents of a child with special needs and is absolutely necessary if your child has challenges that prevent them from making decisions or taking care of themselves independently. Guardianship is an important step in ensuring that your child’s needs are always met.

    Why You Shouldn’t Wait Until Your Child is Near Adulthood

    Even if your child isn’t near the age of adulthood, it’s important to nominate a legal guardian now in the event that you pass away or become incapacitated before your child turns 18. Without your nomination, your child may be left without the care of someone you trust, and the decision of who will care for your child will be up to a court that doesn’t know your child or their unique needs. Thankfully, we’re experienced in nominating guardians for minors and adults, and can walk you through the process of nominating a guardian now, and how to finalize that nomination when your child nears adulthood. We can also help you name short-term legal guardians who can care for your child on a short-term basis if you’re traveling or in the event of an emergency.

    02 | Be There For Your Child with Powers of Attorney

    While not appropriate for all people with special needs, powers of attorney are another important legal tool for parents. Whether your adult child is neurotypical or has special needs, it’s important that you retain some ability to make decisions for them in case they ask for your help or aren’t able to make decisions on their own.

    If your child is high-functioning and able to live independently, powers of attorney may be an appropriate tool to support their care. Through powers of attorney, your adult child can grant you the ability to make financial or medical decisions for them, such as scheduling doctors’ appointments, paying bills, or signing a rental agreement. Your child can also choose whether these powers make it possible for you to act on their behalf at any time or only in the event of their incapacity. Plus, powers of attorney can be customized to meet your child’s specific needs and wishes, ensuring that their care and well-being are always a top priority while still respecting their autonomy and independence.

    03 | Protect Your Child’s Financial Future with a Special Needs Trust 

    Finally, every parent of a child with special needs should consider creating a special needs trust to protect their child’s financial security. This type of trust is designed to provide extra financial support for your child while ensuring that they remain eligible for much-needed government benefits such as Medicaid and Supplemental Security Income (SSI). In fact, giving money directly to a child with special needs can actually cause them to lose their government benefits unless that money is provided to them through a special needs trust.

    A special needs trust can be used to pay for a wide range of needs, including living expenses, household items, health care, and more. And, even better, a special needs trust can be drafted so that you incentivize the people you’ve named as guardians to care for your child the way you are currently caring for them. For example, you may include instructions to financially reward caregivers who take your child to dinner or the movies, so caregivers are properly motivated to provide the kind of care you would naturally, but others may not after you’re gone. Knowing you’ve provided financial incentives for your child to have companionship and care is something many of our clients deeply appreciate.

    Ensuring Your Child Is Eligible For Government Aid

    In order for your child to remain eligible for government aid while receiving funds from a special needs trust, the trust must follow a set of regulations and reporting requirements that vary by state and can be difficult to understand. That’s why it’s crucial to work with us to develop a special needs trust that meets these requirements while being perfectly suited to your child’s unique needs. 

    Your Trusted Advisor When Planning for a Child with Special Needs

    We understand that every child with special needs is different, and that’s why we offer a personalized approach and a comprehensive range of estate planning services, including special needs trusts and legal guardianship nominations, to create a plan that’s unique to your child. If you aren’t sure where to start or what your child may need now and in the future, contact us today at (650) 600-1735. We’ll walk you through your unique situation and develop a plan that ensures your child with special needs has the physical, financial, and emotional support they need now and for years to come.

    This article is a service of Jeannette Marsala, Personal Family Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you’ll get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

  • Have a Loved One with Special Needs? Why You Need Your Plan Reviewed If You Moved Here From Another State

    Have a Loved One with Special Needs? Why You Need Your Plan Reviewed If You Moved Here From Another State

    Life is full of unexpected journeys, and sometimes circumstances lead us to need to move from one state to another. Amidst the excitement and challenges of moving, one critical aspect that demands your immediate attention is your plan for the well-being and security of your loved one with special needs. 

    Whether you moved for a job opportunity, family reasons, or to get a fresh start, it’s crucial to recognize how your carefully crafted special needs plan may be impacted by the difference in our state laws and regulations. What worked well in your previous state may not be as effective or valid in your new home. 

    To ensure your loved one’s future remains secure, it’s urgent to have your plan reviewed promptly after a move and updated accordingly.

    Each State Has Specific Disability Benefit Laws and Programs

    Special needs planning is a multifaceted process, greatly impacted by the laws and regulations of the state where the plan was created. Each state has its own unique legal framework that governs vital aspects of your plan such as guardianship, special needs trusts, public benefits, and Medicaid eligibility. 

    A well-designed plan in one state might not fully protect your loved one’s interests once you relocate. For example, if your loved one benefits from state-sponsored in-home care, you’ll need to apply for a similar program here in your new state, and our program may have very different requirements or processes than your previous in-home care program.

    Your Government Benefits Amount May Have Changed

    Government benefits like Medicaid and Supplemental Security Income (SSI) are essential lifelines for individuals with special needs. However, eligibility requirements and benefits amounts can vary significantly from state to state. A move to another state could potentially disrupt your loved one’s access to these critical programs if your plan isn’t modified accordingly.

    It’s essential to have your loved one’s income and asset limits reviewed in light of these programs and submit any necessary paperwork to update your residence and income levels with our state’s Supplemental Security Income (SSI) office. This ensures your loved one is receiving the right financial support from this program.

    For example, your loved one may have received an extra $49 a month in SSI benefits if you lived in Connecticut, but they may be eligible for an extra $140 a month in SSI if you moved to Delaware.

    Guardianship of Your Loved One May Need Modification

    If you were appointed as a permanent guardian of your loved one in your previous state, you should have your guardianship status reviewed here. Different states have varying procedures and criteria for guardianship appointments, making it essential to review and possibly modify your guardianship arrangements to ensure they align with our state’s requirements.

    For example, a backup or co-guardian may have been court-appointed in your previous state, but if that co-guardian didn’t move with you, you’ll need to seek the appointment of a new co-guardian as soon as possible. This is essential to ensure there’s no disruption in your loved one’s care if you die or become incapacitated.

    Special Needs Trust Requirements Can Differ

    Special needs trusts play a pivotal role in securing your loved one’s financial future while preserving their eligibility for government benefits. However, every state has different laws for managing a special needs trust and reporting it to government agencies, so the effectiveness and compliance of your trust might be jeopardized if it was designed under different state laws. 

    Reviewing your trust with a knowledgeable special needs planning attorney will help ensure it conforms to the specific regulations of our state.

    Ensuring a Seamless Transition for You and Your Family

    Relocating is already a significant life event, and the last thing you need is added stress and uncertainty regarding your loved one’s future. Having your special needs plan reviewed promptly after you move or even before you move will provide peace of mind knowing that your family’s interests are adequately protected during this transition period.

    As you settle into your new home, remember you don’t have to navigate this complex process alone. I’m here to guide you every step of the way. 

    My expertise lies in understanding the intricacies of our state laws and ensuring the special needs plan in place for your loved one remains robust and effective no matter where life takes you.

    To learn more about how I can ensure your special needs plan is updated according to our state’s rules (and continues to stay up-to-date), call me today at (650) 600-1735.

    This article is a service of Jeannette Marsala, Personal Family Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you’ll get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

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