How NOT to use Special Needs Trust Money

Special needs trusts are simple and yet oh so complicated, like almost everything devised by the government. They are a wonderful tool for parents and others to provide money to use for a disabled child while protecting the child’s eligibility for Medicaid and SSI (social security benefits). They can hold any amount of money and that money can be used to supplement the benefits received from the government and thereby, it is hoped, enhance the quality of life of the individual.

The money cannot ever, however, be used to pay for items that the benefits are intended to cover, without causing some reduction in, or sometimes loss of, the benefits. This includes things like:

Cash given directly to the beneficiary for any purpose

Food or groceries

Restaurant meals (except if given as an occasional gift)

Rent or mortgage payments

Utilities such as electricity, gas, and water

Utilities hookup or connection charges

On the other hand, a special needs trust CAN make contributions to an ABLE account, and the ABLE account CAN be used to pay for many of the items the Trust cannot pay for. See? Simple and yet complicated all at the same time.

Parker Counsel Legal Services can help you understand how to use special needs trusts and ABLE accounts together in a well designed plan to provide for the future needs of your child with a special need. We serve families in Texas, Massachusetts, New Jersey, and New Hampshire. Contact us for a consultation at 833-RED-BOOT (833-733-2668) or legal@parkercounsel.com

Special needs planning blueprint





This checklist keeps you organized as you work through creating a plan to care for your child with special needs in the future. Broken into sections that track the Four Keys System we use with our clients, this Blueprint will let you dive in wherever you can without missing items you need to come back to.

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    Myth vs Attorney

    As a special needs parent myself, I regularly tell our clients that getting connected to parent support groups is almost a necessity to get through life with a special needs child. Traditional sources of parenting wisdom and tips, like grandparents, the mommy group at the playground, and even the many many many parenting books at Barnes and Noble simply aren’t going to have the information we need for our differently abled and differently developing children. Special needs parent groups are a lifesaver.

    But there are certain types of information that should still come from professionals. I frequently see bits of info regarding benefits and legal issues passed around in these groups that is just plain wrong. Much of it is ultimately harmless, but a lot of things I see can actually result in the loss of benefits and opportunities if the information is taken as true.

    For example, recently this myth has been making the rounds: that individuals with disablities can only open an ABLE account if they are receicving SSI benefits. This is not true. You do not have to be receiving benefits in order to qualify for an ABLE account. And this is only the latest in a string of myths I see passed around about programs and benefits for kids and adults with special needs.

    [The ABLE National Resource Center has a webinar coming up this Thursday, June 20, to bust that and some other myths about ABLE accounts.
    https://zoom.us/webinar/register/WN_XBFVQO0TQBOyYT1iDCjOxg ]

    Just as you must go to a doctor for a reliable medical diagnosis, you must go to experts for other types of reliable information. An attorney who deals with special needs issues is one great source, and our office is always willing to answer questions – the easiest way to get a question to us is by email legal@parkercounsel.com but you can also call and leave a message. We will get back to you. We are here to help as best we can.

    Make sure you have accurate information about what help your child is entitled to and make sure you have accurate information about how to get those benefits.

    Parker Counsel Legal Services provides estate planning, guardianship, special needs trusts, and other services to families who have children with developmental disabilities in Texas, Massachusetts, New Hampshire, and New Jersey.

    New Hampshire ABLE Accounts

    If you have a child or young adult in your New Hampshire family with a disability, thinking about therapies and medical visits and educational life skills isn’t the only are you need to be thinking about. There are also financial concerns about how the child will meet housing and medical and other future needs.

    The biggest financial necessity is Medicaid and social security benefits, but in order to get those and still have money from parents or other family members to supplement the small cash benefit from social security, careful planning is required. Special needs trusts, trustees, estate planning for family members, and guardianships or alternatives for those that need help are all required in order to maximize the resources available to provide your child with a good life. And now there is another tool that can work alongside the other planning tools – an ABLE Account.

    ABLE accounts are available to anyone with a disability that began before the age of 26. The accounts allow up to $15,000 a year to be deposited with certain tax advantages, and without being considered a resource that will interfere with receiving medicaid and SSI. These accounts can also be managed and money can be spent from them by the individual with the disability directly, rather than by a trustee as with special needs trusts. This makes these accounts especially useful for individuals with physical but not cognitive disabilities who have money management skills.

    You can view details of the New Hampshire program here, but New Hampshire families can open an ABLE account in any state.

    Parker Counsel Legal Services assists families in New Hampshire in setting up special needs trusts, ABLE accounts, guardianships, and other planning needs for special needs family members. Find out how we can help you – call us at 833-RED-BOOT (833-733-2668).

    Massachusetts ABLE Accounts


    Photo by Alexander Mils on Unsplash

    An ABLE account is a type of bank account available to people who have a disability that began prior to the age of 26. The account allows individuals to accumulate their own money in amounts that would otherwise make them ineligible to receive SSI and MassHealth (Medicaid) benefits. They can also manage and spend the money in the account themselves, if they are otherwise able to, something that is not possible with the use of a Special Needs Trust.

    ABLE accounts are especially useful for individuals who have their own income through a job or other source, but the accounts can be useful for other reasons as well. They may even allow an indi individual or their family to spend money to supplement housing costs without causing a reduction in SSI benefits.

    ABLE accounts do not replace the need for a special needs trust, as trusts are able to hold far more money than an ABLE account and are typically used to receive an inheritance or life insurance from a parent. Your attorney can help you figure out how to use ABLE accounts and special needs trusts to maximize the amount of resources available to care for your child throughout their life.

    Families in Western Mass, or other areas of Massachusetts, can find details of the state ABLE account program here. However, an ABLE account can be opened in any state, regardless of where you live.

    Parker Counsel Legal Services helps families in Massachusetts with special needs members to set up a plan to care for their family member to the end of their life, using estate planning, special needs trusts, guardianships or other assistance, and other tools. Call us at 833-RED-BOOT (833-733-2668) to see if we can help you.

    New Jersey ABLE Accounts

    People with developmental or other disabilities that began before they turned 26 years old can save money in special accounts known as ABLE accounts. These are a valuable tool for anyone who receives SSI and Medicaid, since it is the only way a person can save more than $2000 AND manage it themselves without losing SSI and Medicaid benefits they are otherwise entitled to.

    ABLE accounts also provide some other neat benefits and in some situations can be used to increase the amount of SSI benefits paid. They can help families maximize the resources available to an adult child with special needs even if the child is not able to manage their own money. Used in conjunction with SSI benefits and a special needs trust, the ABLE account is proving to be far more beneficial than originally envisioned. Although not everyone can benefit from an ABLE account, it is worth talking with your attorney about to see if it can provide a little extra flexibiilty and resource for your disabled adult child. New Jersey residents can open an ABLE account in any state, but only one account is permitted per person.
    http://www.ablenrc.org/state-review/new-jersey

    Parker Counsel Legal Services provides legal consultation, along with estate planning, special needs trust preparation, and guardianship or alternatives to help parents prepare their adult disabled children for the future. For a short, free, phone call to duscuss your situation, give us a call at 833-RED-BOOT (833-733-2668) or email legal@parkercounsel.com

    Does your child need a special needs trust to get Medicaid?

    Children with developmental disabilities – cerebral palsy, Down Syndrome, autism, and any other condition that began in childhood – who are not able to work and support themselves are probably going to be able to get social security benefits and Medicaid (called MassHealth in Massachusetts) when they turn 18 years of age. In some cases, they can receive these benefits before 18, but in almost every case they can do so after 18. Social security provides a limited cash payment to persons with a disability who have very low or no income and assets. Even if a child with a disability continues to live at home with parents after they turn 18, if they have little or no income and little or no other resources like savings, they will probably be eligible for supplemental security income (SSI) and Medicaid.

    SSI cash benefits are pretty low (currently $770 a month, with some states adding a little bit more), so it’s important to have a way to supplement the limited spending power of that SSI money. While parents are alive, they can buy “extras,” like computers, videos, vacations, even additional therapy or vocational training not covered by insurance. But when the parents die, an inheritance to a child receives SSI and Medicaid will almost always cause them to lose those benefits. People with developmental disabilities who are receiving, or will probably receive in the future, SSI and Medicaid benefits, should never be left an inheritance or be named as a life insurance or pension beneficiary because it will jeopardize their benefits.

    That’s where the special needs trust comes in. If a parent or grandparent puts money into this very special type of trust, that money can be used to supplement the government benefits while keeping those benefits in place. A New Jersey special needs trust, a Massachusetts special needs trust, a New Hampshire special needs trust, even a Texas special needs trust, all work the same way to let parents, grandparents, and anyone else who wants to leave money to improve the quality of life of a person with a disability give them money without causing any problem to their government benefits.

    So back to the original question: Do you need a special needs trust in order for your adult child to get Medicaid? There are two parts to the answer. First, you may need a special needs trust to get Medicaid at age 18 if the child already has significant assets in their own name. Those assets can be moved to a special needs trust so that the adult child meets the very low asset threshold for eligibility.

    The second part of the answer is that even if the adult child initially qualifies for Medicaid without a trust, they will probably need a special needs trust in order to keep those benefits when their parents die. The trust can receive an inheritance, life insurance proceeds, or even pensions, and that money can be used to enhance the quality of life of the adult child without causing them to lose their Medicaid or SSI benefits.

    Parker Counsel Legal Services provides planning and guardianship services to families who have children with special needs. We have offices and licensed attorneys to serve families in New Jersey, Massachusetts, New Hampshire, and Texas. Call 833-RED-BOOT (833-733-2668) to request a consultation.

    The Safety Dance


    “Ah we can dance if we want to, we can leave your friends behind
    Cause your friends don’t dance and if they don’t dance
    Well they’re are no friends of mine” Safety Dance by Men Without Hats

    Parents worry about how the world will treat their children who don’t fit the norm, especially as those children grow older. All children are a bit quirky, and even a few minutes observing the staff on a pediatric hospital ward will demonstrate how easily adult staff members expect and adapt to the “quirks” of their young patients.

    Adults, on the other hand, are expected to conform to the situation, and a lot of adults with developmental disabilities are simply not able to do that, making parents worry about the treatment their adult children will receive in the community.

    The good news is that community based living initiatives and inclusion in the schools provide a lot more opportunities for people of all kinds to be around individuals with developmental disabilities, and so to be better prepared to respond empathetically when needed.

    A story reported recently in the Chicago Tribune illustrates how the world may eventually be. It tells the story of Walker, a man with autism who was having a very difficult day, who met the public safety officers at Loyola University Medical Center after he attacked his mother in the emergency room. And the rest of the story is as good as it can possibly get. This is how the world can be. Read the story here: A man with autism, behaving violently, winds up in the ER. The officers on duty respond – with singing and dancing.

    How to ask for help from family and friends

    Finding and nurturing people who will help your adult child have a safe and fulfilling life is an important part of a parent’s planning for when the parent is not around. Involved and interested family and friends can be the difference between a vulnerable life and a great life. But getting people to be involved isn’t always as easy as it seems. It involves more than simply letting people know you have a child with special needs.

    If you want the people who know your child to be involved, you need to focus on your communication with them so that they have an understanding of your child’s life and so they understand that they are welcome to be part of it in many different ways.

    Here are a few ways to boost your contact and draw people in so that they want to help:

    1. Incorporate More Emotion Into Your Updates

    The human brain is more engaged by storytelling than logical facts. There are a few reasons for this, but the bottom line is that emotion plays a big part in decision making. When you tell people what’s going on with your child, talk like a parent. Let people hear when you are proud, scared, frustrated, excited or whatever about your child’s situation, and do your best to convey whatever emotions your child may be having about what is going on in their life. Rather than a big yearly report about where your child is living and what medical events have occurred over the prior year, pick out a few interesting stories to tell throughout the year.

    Emotions activate the part of the brain that makes us feel as if we are part of something, even if we are not physically present. The more we feel that we are already part of something, the easier it is for us to actually take an action.

    Your family and friends will feel less hesitation to visit or offer suggestions or help for your child when they feel like they are part of the circle.

    2. Make Clear Requests for Help

    Some family and friends may wind up hearing your stories about your child with no real expectation of doing anything other than kind of generally keeping up with the family. In many cases, even if they have a strong interest in the well being of your child, they may not know that there are things they can easily do to be an active part of your child’s life. Making clear and specific requests for action will encourage them to take a step toward less passive interest.

    Requests can be as low key as asking people to send your child birthday cards, all the way up to more time consuming projects like taking your child to a movie or making calls to find a dentist that will work with your child. You don’t want to overwhelm people into feeling personally responsible for your child if they don’t have the time or inclination for that, but you don’t want to skip over smaller things that many people would be happy to do if they only knew they could.

    Ultimately, you are trying to convey to people that they are welcome to be part of your child’s life in whatever way they choose. You will have chosen people who will play legally sanctioned roles for your child when you, the parent are gone, but don’t forget to let everyone else know that they can choose to be involved as much or as little as they want.

    3. Use Pictures

    Picture sharing is so easy now that there is no excuse for failing to share pictures often with your family and friends. Pictures not only contribute to the emotional aspect of your communication, they often stimulate ideas in the minds of your audience – for example, a picture of your child in their room might prompt someone to suggest new drapes that match some preference or interest your child has.

    The Power of Community

    The more people who are paying attention to what is going on with your child, the better off your child will be. Everyone’s life is better when they have friends around. But also important for a person who may not be able to advocate for themselves, the more people who are watching and paying attention to the care your child receives, the less likely any serious problem will develop. Parents may not be there till the end of their child’s life, but parents can protect their child till the end of the child’s life with smart planning.

    Creating an engaged community of people around your adult with special needs

    people sillhouettsOne of the four key planning areas for parents who have a child that will always need assistance with their care is to create a community of caregivers.   For many of these, that means a guardian for personal care and a trustee for money management, but those should not be the only people in your child’s life.  Think of all the different things you as a parent do for your child – you feed and bathe and shelter them, of course, and you make sure they have health insurance and medical care, but you also do things like the following:

    • search out activities to do
    • buy clothes and toys and personal items
    • decide (or help) on clothing and hair styles
    • keep an eye out for new resources
    • notice how caregivers and therapists treat your child and make changes if there are problems
    • keep track of how your child feels and acts so you’ll know if a doctor’s appointment is needed
    • keep company with your child and interact or play with them

    . . .  and this is only a very short list of the things parents do for their children, and that, depending on your own child, you may continue to do into adulthood.

    When you think about the community of people you want to build around your child, these are the kinds of things that your community will be doing for your child.  Some people may visit and play, some will be more task oriented, and some may never see your child in person but will be on the lookout for resources and ideas for others to use. You don’t need a large group of people who can be the full time caretaker, you need a group of people who all contribute to your child’s life in a variety of ways.

    Here are some tips on creating your community:

    1. Ask people if they would like to stay in touch with you and your child.  Many people who have worked with your child develop a fondness and would be delighted to keep up with your child in the future. If you welcome them into the group and give them a way to stay in touch, you may be surprised at how fast your child’s community grows.
    2. Update everyone regularly, and include both major events and little day-to-day details. Make sure to share lots of pictures.  Staying in touch isn’t about giving a quarterly report, its’ about keeping the group informed about your child’s life, which may include big life or medical events, but also includes things like going to the store to buy clothes, or having a great day watching movies at home, or even being sad that grandma’s visit was over.  Little details will keep people informed of how your child lives and what they enjoy or think about. Our family uses a Facebook group for this, which makes it really easy to share pictures, but you can do email groups, or periodic mail, or any other communication technique that you like.
    3. Give people specific permission to be involved in your child’d life and to communicate with the people who are with your child the most.  You want everyone to know that not only is it ok for them to contact you, but that you really really want them to contact you if they have an idea or a thought or suggestion.  Make sure people know that even if they are not the “official” legal caretaker, their participation is welcome and invited.
    4. Ask for help sometimes.  Be sure to ask for help in a range of ways.  Give people ideas about what to do to help – even if its’ as simple as asking for birthday cards be mailed to your child.  If you’re trying to come up with activities your child might like, ask the group for ideas.  If you want someone to come by and visit your child if they’ve been stuck at home for a while due to an illness, ask.  If you’re having trouble finding a new therapist that takes Medicaid, ask if anyone would be willing to make some phone calls.  In other words, let people know what you or your child would like them to do, and most of the time people will happily jump in to do it.

    The more people who know your child and are around in their life, especially as your child grows older and the parents begin to transition out of day to day caretaking, the better off your child will be, and the more at peace you will be that your child will stay safe and happy.

     

    If you are ready to start working on the legal supports needed for your plan, give us a call at 833-RED-BOOT (833-733-2668) or email legal@parkercounsel.com for an appointment.  We’ll help you put together a strong plan that fits your family’s unique circumstances.

    With attorneys serving families in Austin and Central Texas, Western Mass and the Pioneer Valley, Portsmouth New Hampshire and the Seacoast.