Westchester County Special Needs Planning Attorneys

Planning for the future of a loved one with special needs is one of the most significant responsibilities a family can undertake. Special needs planning ensures individuals with disabilities have access to necessary resources and services while preserving their eligibility for essential government benefits. At Littman Krooks LLP, we have been assisting families in Westchester County with thoughtful and effective planning strategies for over 30 years. Our commitment to personal service and attention to detail helps families create secure, sustainable plans for their loved ones. We are here to assist if you are looking for guidance on protecting and caring for a family member with special needs.

Table of Contents

• What Is Special Needs Planning?
• The Role of Special Needs Trusts
• Types of Special Needs Trusts Our Firm Handles
• Planning for Long-Term Care
• Steps to Creating a Special Needs Plan
• Speak with an Experienced Westchester County Special Needs Planning Attorney Today?

What Is Special Needs Planning?

Special needs planning involves preparing for the long-term well-being and financial stability of individuals with disabilities. It goes beyond traditional estate planning by addressing unique considerations such as maintaining access to government benefits, providing for supplemental needs, and ensuring continuity of care. A fundamental component of special needs planning is preserving eligibility for essential government programs, including Supplemental Security Income (SSI) and Medicaid. These programs serve as lifelines for individuals with disabilities, offering crucial financial support and access to medical care. Medicaid, in particular, plays a significant role as the largest health insurance provider in the United States, operating through a joint federal and state partnership with an annual combined cost exceeding $700 billion in 2021.

Families face growing responsibilities due to increasing life expectancies. Advances in medical research and technology mean that children born with disabilities today are likely to live well into adulthood. For example, a male child born in 1970 had a life expectancy of 67.1 years, while a male child born in 2010 can expect to live 75.7 years, an 11.5% increase. Similarly, female life expectancy rose from 74.7 years in 1970 to 80.8 years in 2010, an increase of 7.5%. This longevity requires families to think beyond immediate needs and plan for decades of care and support.

The Role of Special Needs Trusts

Special needs trusts are essential tools in a comprehensive special needs plan. These trusts allow families to set aside funds to benefit an individual with disabilities while maintaining their eligibility for SSI, Medicaid, and other need-based programs. A well-structured trust ensures that funds are used to enhance the individual’s quality of life without compromising their access to government assistance.

Key Benefits of Special Needs Trusts

Preserving government benefits is one of the most significant advantages of a special needs trust. SSI and Medicaid eligibility are determined based on financial criteria, and receiving an inheritance or other direct financial support can disqualify individuals from these critical programs. A special needs trust protects these benefits while providing supplemental funds for needs not covered by government programs. Additionally, the trust offers long-term financial security by allowing for controlled distributions managed by a trustee. This ensures that funds are used appropriately for expenses such as therapies, education, recreational activities, or specialized equipment. A trustee can also handle complex financial matters, relieving families of significant administrative burdens. For example, a trust could fund a communication device or adaptive technology for a child with autism without jeopardizing their Medicaid benefits.

Types of Special Needs Trusts Our Firm Handles

Special needs trusts come in different forms, each designed to meet specific circumstances and financial situations. Choosing the correct type of trust is essential to ensure that individuals with disabilities receive the maximum benefit while preserving their eligibility for government assistance. 

First-Party Special Needs Trusts

A first-party special needs trust is funded with assets that belong to the individual with disabilities. These assets may come from a personal injury settlement, an inheritance, or other sources of income or wealth owned by the individual. First-party trusts are often established when the individual has significant assets but still requires access to government programs like Medicaid or Supplemental Security Income (SSI).

The funds in a first-party special needs trust enhance the beneficiary’s quality of life by covering expenses not provided for by government benefits. Examples include therapy, medical equipment, educational programs, and recreational activities. One important consideration is that first-party trusts are subject to Medicaid payback rules, meaning any remaining funds after the individual’s death must be used to reimburse Medicaid for the benefits provided during their lifetime.

Third-Party Special Needs Trusts

A third-party special needs trust is funded by assets that belong to someone other than the individual with disabilities. Typical funding sources include gifts, life insurance proceeds, or assets bequeathed through a family member’s estate. These trusts are typically created by parents, grandparents, or other relatives who want to provide additional support for a loved one with disabilities.

Unlike first-party trusts, third-party trusts are not subject to Medicaid payback provisions. Any remaining funds after the beneficiary’s death can be distributed to other heirs or designated beneficiaries as outlined in the trust agreement. This flexibility makes third-party trusts an appealing option for families seeking long-term support without forfeiting their estate’s residual value.

Pooled Special Needs Trusts

A pooled trust is managed by a nonprofit organization and combines funds from multiple beneficiaries into a single trust. Each beneficiary has a separate account within the trust, but the pooled resources are invested collectively to reduce administrative costs and increase earning potential. Pooled trusts are often cost-effective for individuals with smaller amounts of money to place in trust.

This type of trust is particularly beneficial for families needing more resources to establish and manage an individual special needs trust. Like first-party trusts, pooled trusts are subject to Medicaid payback rules, meaning any remaining funds after the beneficiary’s death are used to reimburse Medicaid. The nonprofit organization managing the trust typically provides experienced oversight, ensuring the funds are used appropriately to meet the beneficiary’s needs.

Selecting the appropriate special needs trust depends on the individual’s financial situation, the source of the funds, and the family’s long-term goals. Each type of trust has unique advantages, and determining which option is best requires careful consideration and legal guidance. An experienced attorney can help families weigh these factors and create a plan that maximizes the benefits for their loved ones with disabilities.

Planning for Long-Term Care

With increased life expectancies for individuals with developmental disabilities, planning for long-term care has become more critical than ever. Advances in medicine and technology have allowed individuals with disabilities to live fulfilling lives well into adulthood, but this also means families must plan for extended periods of support. A comprehensive plan must address both financial resources and the practicalities of caregiving over time.

A well-crafted special needs plan includes strategies to provide financial stability, access to medical care, and a consistent quality of life. This might involve setting up a trust, purchasing life insurance policies to fund the trust, or creating a care plan that outlines the individual’s needs and preferences. Families must also consider appointing guardians or powers of attorney to ensure continuity of care in the event of the parents or primary caregiver’s incapacity or passing.

Steps to Creating a Special Needs Plan

Developing a special needs plan involves thoughtful preparation and collaboration with experienced legal and financial professionals. Each family’s situation is unique, but certain foundational steps can help ensure the plan effectively addresses both current and long-term needs. A well-constructed plan offers financial security, preserves eligibility for essential benefits, and provides peace of mind for families.

Evaluate Needs

Begin by assessing the individual’s current and anticipated needs. This includes medical care, housing, education, recreational activities, and support services. Consider the level of care required now and in the future as the individual ages. For instance, a young child may require educational support and therapy, while an adult may need long-term housing and medical care. Taking a comprehensive approach helps families identify the resources and support systems necessary for the individual’s well-being.

Establish a Trust

Work with a qualified attorney to create a special needs trust tailored to the individual’s circumstances. The trust should be designed to protect eligibility for government benefits like Medicaid and SSI while providing supplemental financial support for additional needs. This is a critical step in ensuring the individual can access necessary services without compromising their financial stability.

Fund the Trust

Identify and allocate resources to fund the trust. This could include savings, inheritance, life insurance policies, or other assets. For example, parents may designate a portion of their estate to the trust or purchase a life insurance policy specifically for funding purposes. Properly funding the trust ensures that resources are available to meet the individual’s ongoing needs.

Select a Trustee

Choosing the right trustee is essential. This individual or institution must manage the trust responsibly and always act in the best interests of the beneficiary. Trustees are responsible for overseeing distributions, managing investments, and ensuring compliance with legal and financial requirements. Families should consider selecting someone with the skills and dedication necessary to fulfill these responsibilities effectively.

Coordinate with Benefits

Ensure the plan aligns with government benefit requirements to maintain eligibility. Special needs trusts, for example, allow beneficiaries to receive additional financial support without disqualifying them from programs like Medicaid or SSI. Consulting with professionals who understand the nuances of these programs is vital to structuring the plan correctly.

Communicate with Stakeholders

Involve family members, caregivers, and other trusted individuals in planning. Clear communication ensures everyone understands their roles and responsibilities, creating a seamless support system for the individual with special needs. Developing a detailed care plan that outlines the individual’s preferences, needs, and daily routines can also help stakeholders work together effectively.

By following these steps, families can create a well-rounded plan that addresses financial security, preserves government benefits, and ensures that individuals with special needs receive the care and services they require. Thoughtful planning protects the individual’s quality of life and provides families with the confidence that their loved one’s future is secure.

Speak with an Experienced Westchester County Special Needs Planning Attorney Today?

If you have a loved one with special needs and are interested in learning more about what you can do to secure their future, the special needs planning attorneys at Littman Krooks are here to help. We have decades of combined experience helping families implement comprehensive and reliable plans designed to secure their family’s future. To learn more and to schedule a free consultation today, call Littman Krooks at 914-684-2100. You can also connect with our Westchester County special needs planning attorneys through our secure online contact form.