Special Needs Planning

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Planning for the Future of a Loved One with Special Needs

Parents of children with special needs face a unique and profound challenge: planning for a lifetime of care. The goal is to ensure your child will always have a safe environment, financial stability, and access to every available resource, long after you are gone. While government assistance is a critical part of the support system, creating a flexible and comprehensive legal plan is the key to providing true, lifelong security.

The First Step at Adulthood: Essential Legal Documents

Once a child with special needs turns 18, they are legally considered an adult. This means parents no longer have the automatic authority to make financial or healthcare decisions on their behalf. It is crucial to put legal documents in place at this stage.

  • Powers of Attorney: If your adult child has the capacity to understand and sign legal documents, establishing financial and healthcare Powers of Attorney is the first and most important step. This allows you to continue acting as their agent and advocate.
  • Guardianship: If your child is unable to sign a Power of Attorney, you may need to pursue a court-appointed guardianship. This legal process grants you the authority to continue making critical decisions for them.

The Foundation: Special Needs Trusts (SNTs)

The most significant risk to a person with special needs is receiving an inheritance or gift directly. A lump sum of money can instantly disqualify them from essential, needs-based government benefits like Medicaid and Supplemental Security Income (SSI). The solution is a Special Needs Trust (SNT), a powerful legal tool designed to hold assets for the benefit of an individual without counting against them for benefit eligibility. There are two primary types of SNTs.

Third-Party Special Needs Trusts

This is the most common type of SNT, created by a parent, grandparent, or another loved one using their own money. It is an essential component of any comprehensive estate plan for a family with a special needs child. Assets in this trust are used to supplement, not replace, government benefits, paying for things that enhance the beneficiary’s quality of life. A key feature is that upon the beneficiary’s death, any remaining funds can pass to other family members, as there is no requirement to pay back the state.

First-Party Special Needs Trusts

This type of trust is used when a person with special needs receives money directly, such as from a personal injury settlement or an inheritance that was not properly planned. The individual’s own funds are used to create the trust. While it protects their eligibility for benefits, this trust comes with a crucial condition: upon the beneficiary’s death, any remaining funds must first be used to reimburse the state for any Medicaid benefits they received during their lifetime. The trustee’s role in managing these specific rules is a critical aspect of trust administration.

Finding Community and Support

Navigating this journey requires more than just legal documents; it requires community. One of the best resources for families is The Arc of the Triangle, an organization that provides a collaboration of community resources and vital information. You can learn more at their website, arctriangle.org.

Proper planning is an act of love that provides a lifetime of protection. Call our office at (919) 256-7000 to schedule a consultation.