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 serves families in Central Texas, Western Massachusetts, Northern New Jersey, and the New Hampshire Seacoast with special needs estate planning, special needs trusts, and guardianships. Contact us for a consultation at 833-RED-BOOT (833-733-2668) or legal@parkercounsel.com or schedule a short information call at calendly.

Medicaid waivers and developmental disabilities

wheelchair and caregiverIf you have a child with a developmental disability or other special needs disability, you need to know about Medicaid waivers.  Very broadly speaking, a waiver is a program available to persons with a disability and other specific qualifications (depending on the type of waiver) that provides supports and services intended to help the person continue living in a community setting rather than a nursing home or institutional setting.

Waivers may be available to people who don’t otherwise qualify for regular medicaid because their income or assets are above the limit.  They may also be available as additional support for people who are already receiving Medicaid.

Medicaid is a federal program, but each state administers the program, makes some of the rules, and kicks in some of the money to pay for it.  This means each state handles waivers differently.

Our firm has clients in three different states.  Here’s what you need to know for each state.

Massachusetts: The Massachusetts waiver program is administered by the Department of Disability Services.  The majority of waivers south-hadley-107565_1280are for persons age 18 or over, but there are some waiver services for children. You must submit an application to DDS for services.  This application is in addition to your Medicaid (MassHealth) application.  Placement in waiver programs occurs during the open enrollment period each year.

Information on applications and available Medicaid waivers in Masschusetts is here: https://www.mass.gov/orgs/department-of-developmental-services

 

 

New Hampshire: New Hampshire has several waivers covering both children and adults.  The application process is integrated into the downtown PortsmouthMedicaid application at the New Hampshire Department of Health and Human Services, here: https://www.dhhs.nh.gov/dfa/apply.htm  There is sometimes a waiting list for waivers, but it is typically less than a year and may be far shorter.

 

 

 

 

Texas: Texas has a number of different waiver programs that serve both children and bluebonnetadults.  Children who do not otherwise qualify for Medicaid due to family resources may qualify for one or more of the waivers.  Texas has very long waiting lists for most of its waiver programs, however, several as long as ten years.  It is recommended that all persons with a developmental disability have their name placed on the “interest list” which allows them to apply for the waiver as spots come open.  This means you can place your child on the interest list without knowing whether they will actually qualify for it or not at the time they come to the top of the waiting list.  If they no longer need the waiver when a spot is open, you can simply decline to apply.  Two different state agencies handle waivers and each has their own interest list, so you must get on all that may apply to your child.  You can find the information you need to get on these lists here: https://www.navigatelifetexas.org/en/insurance-financial-help/texas-medicaid-waiver-programs-for-children-with-disabilities

 

Medicaid and the waiver programs are critical benefits for persons with serious disabilities that prevent them from supporting and caring for themselves.  Parents should seek out and obtain any relevant government benefits such as these as part of their complete plan for their child’s lifetime.  These benefit programs generally provide the foundation of care that can then be supplemented by the resources of the parents.  For more information on leaving money or assets to care for your child with a disability without endangering their eligibility for Medicaid and waiver programs, give us a call at 833-RED-BOOT (833-733-2668) or email at legal@gmail.com.

 

4 Things to Know About ABLE Accounts

accountant-1794122_1280ABLE accounts are a relatively new tool that people with disabilities and their families have to use in planning for adulthood.  ABLE is an acronym for Achieving a Better Life Experience and the basic idea is that it allows the accumulation and spending of money in the name of the disabled person without causing the loss or reduction of SSI (social security) and medicaid benefits.  Before the ABLE accounts, this was not possible.

ABLE accounts do NOT replace the need for special needs trusts and other planning tools, but they do some very useful things for some circumstances.  Here are a few basic things you should know about ABLE Accounts:

  1. ABLE accounts are the ONLY way an individual can accumulate money in their own name and still receive all the SSI and Medicaid benefits they would otherwise be eligible for. However, there are limits to the amounts of money – currently up to $15,000 per year and $100,000 total can be accumulated without causing a benefits disruption.  The yearly amount may fluctuate from year to year.
  2. ABLE accounts are only available to individuals whose disability occurred prior to their 26th birthday.  This means all individuals with a developmental disability such as cerebral palsy, autism, or Down Syndrome are eligible, as well as individuals whose disability was the result of an accident or medical malpractice or illness, as long as it occurred prior to age 26.
  3. Funds in an ABLE account may be able to pay for some things without causing an SSI reduction that would occur if funds from a special needs trust or another source were used.  This means that even people who are not capable of handling an account themselves, may benefit from having one.  This is a benefit that should be discussed with your attorney to see if using an ABLE account in conjunction with other tools may be useful.  This also may be a benefit that future legislative changes could eliminate, so if you are using an ABLE account for this purpose you will need to keep a close eye on legal and regulatory changes.
  4. Any funds being held in an ABLE account that remain at the time of the individual’s death are subject to claim by Medicaid. It may still be a good idea to accumulate money, but in many cases it may be better to avoid using the ABLE account merely as a savings account because of the possibility of it eventually going to Medicaid rather than designated beneficiaries.

Not all states currently have ABLE accounts, but you do not have to open an account in the state in which you live.  You can find great information on the specifics of currently available accounts on the ABLE National Resource Center website.

For more information generally on planning for the future of a child with special needs, you can read our articles here and here, or call our office for a short, free consult.  You can reach us toll free at 833-RED-BOOT (833-733-2668).  We serve families in Texas, Massachusetts, New Jersey, and New Hampshire.

Special needs trusts and other scary things

planning journalCan you guess what the hardest part of doing special needs planning is?

Getting started. Hands down, the number one thing that keeps people from doing their plan is never getting started.

Is the thought of calling an attorney intimidating/scary/expensive/overwhelming?

Here’s how we can help you get over that and start your plan – talk to us on the phone for 15 minutes and you’ll see just how nice and helpful we can be. Tell us a little about your family and we’ll walk through what we can do for you. We guarantee that you will learn something new when you talk to us.

Schedule your free, no strings attached phone introduction now – you can even drink coffee while we talk!
https://calendly.com/parkercounsel

We have attorneys in Central Texas, the Pioneer Valley of Massachusetts, Northern New Jersey, and Portsmouth, New Hampshire that can work with you to design a plan that will provide all the supports needed to care for your child with a disability once you are no longer able to do so.  We will help you figure out the seemingly impossible task of caring for a child for many years after you are no longer around.

So click the calendar link above and take advantage of this free, personal introduction to our firm and what we can do for you.  We guarantee you’ll learn something you didn’t know before.