planning for a loved one with special needs. © 2012 mcdowall cotter2 robert d. vale

Planning for a Loved One With Special Needs

© 2012 McDowall Cotter2

Robert D. Vale


Brett S. Lytle


Jaclyn B. Smith

What Does Planning Involve?


Preserving your child’s financial security and quality of life

Addressing key issues:Understanding the role of public benefits

Making decisions about the future

Using estate planning/trusts to protect assets

Part 1:Understanding Public Benefits



Public Benefits at a GlanceFinancial BenefitsFinancial Benefits

Supplemental Supplemental Security Security

Income (SSI)Income (SSI)• Means Tested: Means Tested:

Limited income and Limited income and assetsassets

Social Security (SS)Social Security (SS)&&

Social Security Social Security Disability Insurance Disability Insurance

(SSDI)(SSDI)• Not Means TestedNot Means Tested: : subject to work credits or subject to work credits or

parents’ eligibilityparents’ eligibility

88

Public Benefits at a Glance


Medical BenefitsMedical Benefits

Medi-CalMedi-Cal• Automatic Automatic

with SSIwith SSI

• Must apply for Must apply for SS/SSDISS/SSDI

MedicareMedicare• After two After two

years of SSDIyears of SSDI


Supplemental Security Income (SSI)

Must meet SSA’s definition of “disability” and have limited assets/income

Provides monthly income for food/shelter

Gateway to Medi-Cal / in-home support services


Social Security (SS) / Social Security Disability Insurance (SSDI)

Social Security for individuals:Disabled before age 22 andWith parents eligible based on their work

record who are retired, disabled or deceased

SSDI for individuals with work record

Social Security benefits may reduce or eliminate SSI benefits


Medical Assistance & Support

Medi-Cal:SSI recipients receive automaticallyCovers “medically necessary” services,

equipment, hospitalization In-home services needed to live at home:

personal care, housekeeping, cooking, transportation to doctors

Medicare:Medical coverage, including doctors, hospital,

skilled care


SSISSI Medi-CalMedi-Cal

SSDISSDI MedicareMedicare

How Benefits Work Together


Part 2:Making Decisions About the Future


Case Study: Nathan

Current situation:18-year-old with autism

Lives with mom

Income from work programs, SSI, Social Security (from dad who is deceased)

Limited personal assets (clothing, tv)

Qualifies for Medi-Cal


Case Study: Nathan

Future situation:Who will make health care decisions?

Who will make financial decisions?

Where will he live?

How will his medical expenses be paid?


What Plan Could Nathan’s Mom Make?

Possible Options:Make no decisions/plans

Leave money to Nathan

Disinherit Nathan

Leave money to a future caregiver

Establish third-party SNT for Nathan

Establish first-party SNT for Nathan


Part 3:Creating an Effective Plan

for Your Child


What Steps Should You Take Today? Step 1: Envision Your Child’s Future

Planning ahead makes a difference: Where and with whom will your child live? What type/level of care will be required? Will a guardian/conservator be necessary? Who else will be involved? What kind of lifestyle is desired? What unforeseen challenges could arise?


Lays out goals/expectations:Details preferences, needs, wishes, both

medical and personalLists key people in child’s life

Helps guide:Family membersTrusteesCaregiversOthers

What Steps Should You Take Today? Step 2: Create a Memorandum of Intent


Monthly income: SSI, SSDI, Social Security, earned/unearned

income

Monthly living expenses:Housing, food, transportation, medical,

recreation, etc.

Consider how any shortfall will be met

What Steps Should You Take Today? Step 3: Estimate Income & Expenses


Provides supplemental funds for living expenses not covered by other income sources

May be established by parents:Through willThrough living trust

“Living” SNT lets others contribute

Trustee has discretion over distributions

What Steps Should You Take Today? Step 4: Utilize a Third-Party SNT


The SNT Trustee Responsibilities

What are the trustee’s responsibilities?Invests/manages assets

Distributes funds

Keeps books

Files tax returns

Hires advocates and care managers, etc., as needed


Selecting an SNT Trustee

Who should be the trustee?

Parent with professional co-trustee

Corporate or other professional trustee

Successor trustee


What Parents Should Do

Create Memorandum of Intent

Calculate future financial need

Establish SNT through will or living trust

Fund SNT with life insurance

Name SNT as beneficiary of accounts, plans, etc.

Reduce taxable estate


What Your Child Should Do

Sign Advance Directives, if legal capacity

Have a legal guardian appointed:When child without mental capacity becomes

an adult and parents want to maintain legal responsibility

Court appoints legal guardian


What If Your Child Has Assets?

Establish a First-Party SNT:Provides funds for living expenses not covered by other income sources

Maintains eligibility for public benefits

Must be established by parent, grandparent, legal guardian or the court

State must be reimbursed from the trust for all Medi-Cal expenses


Get Started Today

Understand your child’s eligibility for public benefits.Make plans for the future to maximize public and private resources for your child’s benefit.Make the SNT a key part of your estate plan.Contact a special needs attorney for the assistance you need.

Thanks for Attending

www.mcdlawyers.net

2070 Pioneer Ct.San Mateo, CA

94403Tel: 650-572-7933Fax: 650-572-0834

planning for a loved one with special needs. © 2012 mcdowall cotter2 robert d. vale

Documents

nathan slide

mcdowall cotter7 slide

mcdowall cotter5 slide

future slide

assets slide

child slide

lytle slide

vale slide