Smart Special Needs Planning: Pitfalls & Strategies

Understanding Public Benefits for Disabled Individuals

“Both the state and federal government, administered through the Social Security Administration (SSA) and Medicaid provide disabled individuals with a variety of life enhancing, and sometimes life sustaining, public benefits.”

Public benefits for disabled individuals include health care, supplemental income, and resources, like day programs and other vital services. Some benefits are based on the individual’s disability status, but others are “needs tested,” where eligibility is determined based on financial resources, as explained in the article “Planning for loved ones with special needs” from NWTimes.com.

The Importance of "Needs Testing" in Special Needs Planning

“Needs testing” is something that parents must address as part of special needs planning, in concert with their own estate planning. This ensures that the individual’s government benefits will continue, while their family has the comfort of knowing that after the parents die, their child may have access to resources to cover additional costs and maintain a quality of life they may not otherwise have.

The Role of Estate Planning in Preserving Government Benefits

The Risks of Inadequate Planning for Special Needs Families

Families must be very careful to make informed planning decisions, otherwise their loved ones may lose the benefits they rely upon.

Utilizing Special Planning Tools and Expert Assistance

The Value of an Elder Law Estate Planning Attorney

A variety of special planning tools may be used, and the importance of skilled help from an elder law estate planning attorney cannot be overstated.

The Impact of "Re-determination" on Disabled Individuals

One family received a “re-determination” letter from the Social Security Administration. This is the process whereby the SSA scrutinizes a person’s eligibility for benefits, based on their possible access to other non-governmental resources. Once the process begins, the potential exists for a disabled person to lose benefits or be required to pay back benefits if they were deemed to have wrongfully received them.

Navigating the Complex Process of Benefits Eligibility Review

In this case, a woman who lived in California, engaged in a periodic phone call with California Medicaid. California is known for aggressively pursuing on-going benefits eligibility. The woman mentioned a trust that had been created as a result of estate planning done by her late father. The brief mention was enough to spark an in-depth review of planning. The SSA requested no less than 15 different items, including estate documents, account history and a review of all disbursements for the last two years.

The process has created a tremendous amount of stress for the woman and for her family. The re-determination will also create expenses, as the attorney who drafted the original trust in Indiana, where the father lived, will need to work with a special needs attorney in California, who is knowledgeable about the process in the state.

Keeping Special Needs and Estate Planning Documents Updated

The Importance of Periodic Reviews and Adjustments

Similar to estate planning, the special needs process required by Medicaid and the SSA is a constantly evolving process, and not a “one-and-done” transaction. Special needs and estate planning documents created as recently as three or four years ago should be reviewed.

Reference: NWTimes.com (June 21, 2020) “Planning for loved ones with special needs”

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