As parents, ensuring the long-term welfare of children with special needs can be complex, given their increased financial and care requirements. We recognize the significance of proper planning to benefit both the child with a disability, including an adult child, as well as any siblings who may shoulder caretaking responsibilities.
Let a Florida special needs planning attorney from our team assist you in securing a stable and thriving future for your family.
Contact us at Elder Needs Law for compassionate and trustworthy guidance.
Elder Needs Law serves communities all throughout Florida, including Miami, Aventura, Boca Raton, Plantation, Kendall, and more.
Special Needs Trusts
The best and most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and not lose their eligibility for specific government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits. The special needs trust can be created outright, as a stand-alone trust, or it can be made a part of the parent's revocable living trust.
The two main types of special needs trust that parents of young children (with special needs) that are generally utilized are:
Parents and other family members often use the third-party special needs trust to assist a person with special needs. These trusts can hold any asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and different types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary's access to benefits, and the funds can be used to pay for the beneficiary's supplemental needs beyond those covered by government benefits.
A pooled trust is an alternative when the parents do not have a trustee to take over. Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes while maintaining separate accounts for each beneficiary's needs. When the beneficiary dies, the funds remaining in the pooled trust reimburse the government for care. Still, a portion also goes towards the non-profit organization responsible for managing the trust.
If you've established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. Make sure you have enough insurance to pay for your child's care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents' estate intact for other family members.
An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.
Florida ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like Medicaid and SSI but can be used to pay for various qualified expenses. These accounts are best suited for those with special needs who are high functioning and would benefit from direct access to funds (as compared to a special needs trust where the money will always be held, managed, and disbursed by a trustee).
Contact a Florida Special Needs Planning Attorney Today
At Elder Needs Law, we are committed to empowering families to secure the best possible future for their loved ones with disabilities. Our comprehensive and personalized approach to special needs planning ensures that your child's financial and care needs are met, providing peace of mind for you and your family.
Don't navigate this complex journey alone. Let our experienced team at Elder Needs Law guide you through the intricacies of special needs planning, creating a tailored strategy to protect your family's interests.
Contact us today to schedule a consultation and take the first step toward securing a stable and thriving future for your loved ones.