The government prepares a budget. Businesses and families prepare budgets. A special needs trust should be no different. Unfortunately, many trustees of special needs trusts (especially family members of trust beneficiaries) have little or no experience handling financial matters for another person. Add to that the fact that special needs trusts are often funded with sums of money that greatly exceed a trustee's own means and you have a recipe for mismanagement. The smartest solution is to name a professional as a trustee of a special needs trust, either alone or in conjunction with a friend or family member of…
Social Security Disability Insurance (SSDI) is a federal program that provides cash assistance to people with disabilities who are unable to participate in sustained gainful activities. Unlike some programs, like Supplemental Security Income (SSI) and Medicaid, SSDI provides benefits to people regardless of their financial circumstances. Because SSDI is an insurance program that most workers contribute to through payroll taxes, as long as an SSDI recipient is not earning much money from working, he or she can have unearned income (income not earned by working) and unlimited resources and still receive SSDI. On top of the cash benefit, people…
A number of articles in The Voice have stressed the importance of being careful when choosing trustees to manage special needs trusts. Often the choices seem to come down to only two: a family member or a bank. However, family members are often problematic for reasons explained in a recent Voice article. On the other hand, banks and trust companies can be impersonal, often will not handle trusts with less than $1 million in assets, and may not have personnel who are knowledgeable about the multitude of unusual issues specific to serving a special needs beneficiary. There is sometimes a…
You may have heard the terms "special" needs trust and "supplemental" needs trust and wondered what the difference is. The short answer is that there's no difference. Here's the long answer. When the field of special needs planning began some two decades ago, trusts created for people with disabilities were generally called supplemental needs trusts. The thinking was that the purpose of the trusts was to supplement the assistance provided by Medicaid, Medicare, Social Security, Supplemental Security Income and other public benefits programs whose level of support is meager at best. With passage of the OBRA legislation in 1993 authorizing…
In recent days, several prominent Republican governors have indicated that they will expand their state Medicaid programs to cover people who have incomes up to 138 percent of the federal poverty level, a major victory for low-income people with disabilities. In addition, the Department of Health and Human Services has just released regulations governing the essential health benefits that all individual and small group health insurance plans must offer as part of the new health care law. When Congress passed the Affordable Care Act, also known as Obamacare or the universal health care law, in 2010, the law required all…
Across the country, according to U.S. Census figures, 20 percent of adults below age 65 have developmental or physical disabilities – and almost 70 percent of the families of special needs adults in a recent MetLife survey said they worried about their offspring's future. The Alta California Regional Center, which serves 18,250 people with developmental disabilities in 10 counties, has about 5,000 adult clients who still live at home with their parents, just as Jessica and Lori do. "And every one of those clients will age," said Phil Bonnet, the regional center's executive director. "People who grew up in our…
As children with disabilities enter adulthood, more parents are joining forces to create independent housing that is more "home" than "facility." Baruch and Joyce Schur were out of options. They couldn't find anywhere for their physically and intellectually disabled 26-year-old son to live, at least nowhere that met their criteria or didn't have a years-long waiting list. The 55-year-old couple made plans to move out of state. Uprooting themselves from their native Chicago and leaving friends and a family business was the only way to give Josh a home – not an institution – that offered independence, a kosher kitchen,…
Parents of children with special needs are no strangers to years of expensive care for their children. As a result, a growing number of financial-services companies, lawyers and financial planners are referring to themselves as “special-needs planners”, and help parents provide for children with disabilities, particularly in the event that parents are no longer alive to do so. These professionals provide guidance for families through the complex maze of federal and state programs for disabled individuals, and help establish trusts, insurance policies, retirement plans and estate-planning documents. The financial crisis has added urgency to families’ concerns insofar as how their…
Liz and Jennie are sisters who have always been close. Liz suffers from severe manic depression, but with medication she is able to live on her own, although she can't work. Because of her condition, Liz receives Supplemental Security Income (SSI), Medicaid, and she also lives in a government-subsidized apartment. For the last few years, Liz's aunt, as part of her estate planning, has written Liz a check for $10,000. Since Jennie knows that receiving large sums of money could jeopardize Liz's eligibility for her government benefits, she encourages her sister to endorse the check over to her so that…
Parents typically face two choices when selecting a trustee to manage a special needs trust for their child when the parents have died. One choice is a professional trustee–a bank or trust company or an individual who is in the business of serving as a trustee. Of course, professional trustees charge fees, and many banks and trust companies have a minimum trust balance requirement in order to serve as trustee. The other choice is to name a family member to serve as trustee, such as a sibling of the trust beneficiary or some other trusted family member. However, in most…
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