Special Needs Planning Attorneys in Westchester County
Serving New York County, Putnam County & Dutchess County
Do You Want to Protect Someone You Love Who Lives with a Disability?
Whether they are a child, spouse, other relative, or even a friend, if you have someone you deeply care about who lives with a disability, you can factor them into your estate plan. Special needs planning refers to the steps you’ll take to ensure that such a person in your life can benefit from what you’ll leave behind to them without affecting their eligibility to receive important public benefits.
At Corliss Law Group, P.C., we work with clients who want to ensure that a disabled loved one will be well-positioned when the time comes that they are no longer able to be there to protect them. Through careful planning, we can help you create a plan that protects your loved one’s ability to benefit from their inheritance without risking eligibility for Supplemental Security Income (SSI) and/or Medicaid.
How a Special Needs Trust Protects Your Loved One
Central to most special needs planning is a Trust designed especially for a beneficiary who is living with a disability of any kind. There are three types of Supplemental Needs Trusts: First-Party Trusts, Third-Party Trusts, and Pooled Trusts.
A First-Party Trust is appropriate for certain disabled beneficiaries who have assets of their own, in excess of the resource allowance. Placing funds they already own in a well drafted, First-Party Trust will protect eligibility of those disabled means tested government benefit recipients under the age of 65.
When the beneficiary dies, funds remaining in the First-Party Trust will first be applied to reimburse the government for expenses incurred to provide the public benefits.
Third-Party Trusts are most often used by parents of children living with disabilities, but a beneficiary of any relationship can be named. The trust makers will fund the trust with things like bank accounts, real estate, vehicles, and virtually any other kind of asset or property. Just as with a First-Party trust, the beneficiary can use whatever is in the trust without affecting their eligibility for public benefits.
Unlike a First-Party Trust, though, whatever is leftover in a Third-Party Trust after the main beneficiary dies can pass on to subsequent beneficiaries or be named as a charitable donation. No reimbursement for using public benefits is required.
Pooled Income Trusts are a Supplemental Needs Trusts that pools the resources of multiple beneficiaries for investment and use by the depositors. Each beneficiary is entitled to a separate sub-account that will reflect their contribution and not impact their eligibility to receive public benefits.
The Pooled Income Trust is particularly helpful for Medicaid homecare recipients who need access to more of their income than Medicaid permits. The homecare recipient deposits with the Trust their excess monthly income that Medicaid deed is too much for them to keep. The deposited income is considered exempt by Medicaid and the Medicaid recipient is permitted to use the money for their sole benefit. This avoids the reduction or loss of benefits due to excess income. The alternative to participating in the Pooled Trust is to contribute the excess income to the cost of one’s care by paying it to the Department of Social Services.
Funds deposited in the Trust are available to participants to pay for items not covered by Medicaid or SSI such as vacations, clothing, certain medical expenses NOT covered by the Government, and other extras that enhance their quality of life.
Just as with a First-Party Trust, however, a whatever is left over in a beneficiary’s sub-account their death is used to either reimburse the government or benefit other disabled beneficiaries participating in the Pooled Trust. Note too, if a homecare recipient becomes a permanent resident of a nursing home – the funds remaining in the resident’s Pooled Trust sub-account must be spent down on the nursing home bill before Medicaid would pick up the nursing home expenses.
Learn more when you schedule a consultation with one of our special needs planning attorneys in Westchester County and the surrounding counties. Reach out to us online or call (914) 499-0722 to arrange yours today!
If you have an active life insurance policy, our estate and special needs planning attorneys can review with you the best way to hold the policy and discuss how the death benefit should be paid to optimize your goals. With proper planning, a policy payout will not have to go through probate, interfere with a beneficiary’s government benefits, or be taxed as part of your estate.
Contact Corliss Law Group, P.C. for Legal Assistance
If you need to ensure the financial stability and future of a loved one living with a disability, please contact us online and request a consultation! We offer meetings in person, via teleconference, or videoconference.
“The Corliss Law Group returned calls promptly and answered all of our questions.”- Karen C.