Long-term Planning for Children with Special Needs

Do you have questions about long term planning for children with special needs. Raising a child with special needs can be a challenging and rewarding lifelong task. Day-to-day decisions are carefully considered to determine how it can affect your child. Sometimes, it is easy to get lost in your child’s day-to-day needs and lose sight of the planning necessary to ensure that your child’s future well-being is planned.

One of the first concerns of parents with special needs children is how to protect their child’s eligibility for means-tested government benefits after the parents are no longer able to act as the child’s primary caregiver. Although this answer will always depend on the nature of the circumstances and type of benefits received, the most common answer is a Special Needs Trust.
A Special Needs Trust can be an excellent planning tool to keep your child eligible for government means-tested benefits, such as Supplemental Security Income (“SSI”) and Medicaid. In order to continually qualify for these benefits, an income and asset threshold must be met. Federal Law 42 USC 1396(p)(d)(4)(A) allows Special Needs Trusts to hold funds and assets for the benefit of special needs children without risking their eligibility for means-tested benefits.
Special Needs Trusts made pursuant to this federal law are called “D4A” trusts. These D4A Special Needs Trusts can protect eligibility for government means-tested benefits because these trusts, unlike ordinary trusts, are not considered “countable assets” with respect to benefit programs’ income and asset threshold calculation.
It is important to note that only a parent, guardian, or grandparent can create a D4A trust – the beneficiary of the trust cannot create it themselves. When beginning to plan or create a Special Needs Trust on behalf of a child, careful consideration should be given to how the trust will be funded and who should act as its trustee for the benefit of the special needs child.
The above is not as complicated as it may seem, and any questions regarding the long-term planning for a special needs child can be answered with the helpful counsel of an attorney.
This information prepared for your benefit by David J. Elmore of J.K. Winters, P.C.