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How to Provide for a Special Needs Child in Your Will

Posted by Anthony Serra | Sep 05, 2019 | 0 Comments

There is no substitute for loving parents

There was a time (pre-1990s) when leaving money in your will to a child with special needs was ill advised since that would jeopardize certain government benefits to which your child was entitled, especially Medicaid and Supplemental Security Income (SSI). That's because Medicaid and SSI are “means-tested” benefits which means that if your child has assets in his or her name, they no longer qualify for those benefits. In other words, your child needs to be poor to receive such benefits. 

But in the 1990s, federal legislation was passed permitting Special Needs Trusts to be established allowing a person with special needs to have access to money without disrupting their “means-tested” government benefits. These Special Needs Trusts can be funded with the disabled person's own money (for instance if they recovered money in a lawsuit) or with money from third parties such as parents and grandparents (for instance if they receive money from a parent's estate). Special Needs Trusts funded with third-party funds are called Supplemental Benefits Trusts. Generally speaking, Special Needs Trusts are intended to supplement, not supplant government benefits.

Now, unlike the pre-1990 days, you can leave money to a special needs child, but to do so, you must state in your will that you want the funds distributed into your disabled child's Supplemental Benefits Trust and not to your child directly. Best practice is to create the Supplemental Benefits Trust at the time you sign your will, with the expectation that the trust will not be funded until you die and your estate makes a distribution. If you fail to sign a will, your estate will pass to your surviving heirs, including any disabled child, without the benefit of the protections afforded by a Special Needs Trust. 

Special Needs Trusts and Supplemental Benefits Trusts are tricky since they must meet certain statutory requirements in terms of how the funds are managed and accessed, but an elder care and disability lawyer should be equipped to draft these special trusts. It is certainly a question you want to ask your attorney before hiring them.

About the Author

Anthony Serra

Tony Serra is a passionate advocate, especially for the elderly, disabled and those of modest means who need the services of an experienced and caring attorney. For more than 30 years, Tony has been helping common, everyday folks navigate their way through life's turbulent waters. Through innovation and utilizing modern technology, Tony and his law firm are now able to offer quality legal services that at one time were prohibitively expensive, at a fraction of the cost. If you need basic legal services, such as a Will, Power of Attorney, Living Will, Special Needs Trust, real estate transactions, uncontested guardianship pleadings and much more, please visit our website and our SMART LAW legal services platform. You will be pleasantly surprised by what we offer and glad you did! Tony is also an experienced mediator and founder of the Conflict Resolution Center of NJ. Tony has specific training in family matters as well as elder law and contested guardianship and estate cases.  


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