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Woburn Special Needs Planning Attorney

If your family includes a child or other relative with special needs, you may be surprised to find out that your situation isn’t unusual. According to the CDC, 26 percent (one in 4) of adults in the United States have some type of disability. It’s important to put a plan in place so that you can protect your loved one’s present and future lifestyle.

Types of Special Needs

There are four categories of special needs:

  • Physical special needs such as muscular dystrophy, chronic asthma, epilepsy, or congenital defects
  • Developmental special needs such as Down syndrome, autism spectrum disorders, dyslexia, cerebral palsy, or fetal alcohol syndrome
  • Psychiatric special needs including attention deficit disorder (ADD), attention deficit hyperactivity disorder (ADHD), bipolar disorder, or schizophrenia
  • Sensory impairment such as blindness or deafness

Though those with minimal impairments and appropriate medical, educational, and/or mental health support, may be able to lead relatively typical lives, many with more severe disabilities may remain unable to work or even socialize. Some may require assistance with daily household or hygiene tasks, and others may need long-term constant care. In most cases, people with special needs will require some measure of financial support.

How Proper Estate Planning Can Support Your Loved One’s Life

No matter how deep your devotion to your special needs relative, you have to face the fact that you may not always be around or capable of providing care, especially if the individual is your child. An experienced special needs attorney will be able to help you keep your loved one safe and comfortable by creating a special needs trust.

Special Needs Trust

A special needs trust, also known as a supplemental trust, is established to hold money intended to enhance the life of your loved one while protecting their eligibility for government programs meant to protect them. There are two types of these trusts:

  • Third-party trusts are established by a parent or loved one for the benefit of a special needs child.
  • Self-settled trusts are created with the child’s own assets, often an inheritance or settlement.

Your experienced Massachusetts special needs trust attorney will help you pick the most dependable person as a trustee. In the trust document, you provide directions to the trustee as to how the money in the trust is to be distributed. The trustee will then be tasked with managing the flow of the trust’s assets to meet your loved one’s needs.

Benefits of a Special Needs Trust

Because a special needs trust is irrevocable, meaning you (the person who created the trust) will have no access to the money it holds during your lifetime, it will:

  • Protect your funds from taxation, creditors, and judgments against you
  • Provide funding for “extras” for your special needs loved one like going to the movies or travel
  • Keep your loved one’s eligibility for one or more of the following government-funded programs:

        -MassHealth (a government program that provides health insurance to people with disabilities)
        -Supplemental Security Income (SSI)
        -Social Security Disability Income (SSDI)
        -Federal Food Stamps and housing subsidies

This will be a blessing because it means that government programs will cover doctor visits, prescription drugs, hospitalizations, and a stipend for rent and food, while the funds in the special needs trust will be there to cover things like:

  • Private transportation costs
  • Treats, day trips, entertainment, short vacations
  • Extra clothing
  • Pet costs
  • Computer equipment

The special needs trust is the perfect place for money that comes to your special needs loved one and might jeopardize government benefits if it remained in a bank account. This includes money that comes from an inheritance, a gift, or a personal injury settlement.

Funding the Trust

A trust is basically an empty box that must be filled with assets. Families must consider how to fund the trust and at what levels. Funding must be realistic in relationship to the needs of the loved one. If a family doesn’t have enough resources to adequately fund a trust, one option may be to consider funding it with life insurance.

The ABLE Act

The Achieving a Better Life Experience (ABLE) Act allows individuals with disabilities and their families to save funds in tax-exempt savings account — income earned by and contributions made to the account aren’t taxed. The money in these accounts can be used for qualified disability expenses, and it doesn’t apply to the income and asset limits for SSI and MassHealth. To open an ABLE account, an individual must have become disabled before age 26.

Individuals may have only one ABLE account, and total contributions to that account, including from family members and friends, are limited to $14,000 per year. The funds may be used for expenses, such as housing, education, transportation, health care, and assistive technology.

Contact Us Today to Take Care of Your Loved One

The beauty of a special needs trust is that it enables government programs to take care of your loved one’s basic needs  while the trust provides for all the extras that make life more comfortable, more pleasurable, and more fulfilling. If you want to make sure your loved one will be well provided for, you need a knowledgeable Massachusetts special needs trust lawyer. Contact The Heritage Law Center today.