Spring Into Action – March 2019

Disability; what is considered a disability? If a child is living with special needs or a person is living with a physical, mental or intellectually-
diagnosed condition, a special needs trust may be of benefit. A family member may want to establish a third-party supplemental needs trust for a loved one, in an effort to set aside assets for this person to use presently or at a future date. Other family members are able to contribute to this trust, as well. The money put into the trust is exempt from being counted as an asset, for government purposes, and there is no Medicaid payback assigned to this type of trust.

Let’s look at what happened to a young woman living with special needs. Jane was 24 years old and diagnosed with a neurological disorder. Her family talked, on occasion, of how they would leave money to Jane, to help
her with her day-to-day care, if they died. The conversations were productive, but no one acted upon them. Jane’s uncle died and left her an inheritance of $150,000. Jane accepted the inheritance and was very happy, for a short time. Because Jane was receiving government benefits, SSI – Supplemental Security Income and Medicaid, her benefits were cancelled when she accepted this money. Now Jane had to use the
$150,000 to pay for her medical needs, food, therapy, and other day-to-day
necessities as well as any entertainment, vacations, and general wants and
desires.

Jane’s new-found money did not last very long. Within nine months she had spent the money buying gifts for the family, purchasing a car for a relative, taking the family on a vacation, and her general day-to-day care. All this spending was fun for a while, but when Jane’s money ran out, no one knew what to do to help Jane. She applied for her government benefits to resume. However, because Jane had gifted so much money away to family and friends, she had a waiting period, of many months, before she could qualify for the needed benefits.

Luckily for Jane, her family came to the rescue. They cared for Jane, helping her in any way they could. Unfortunately, this is not always the
case. Many times, after the money is depleted, friends and family tend to distance themselves from their loved one. This leaves the person living with a disability in a vulnerable position, with no money and no healthcare.

This spring think about what your family needs and how you can provide for them now and after you are gone. If your family member is living with a physical, mental or intellectual disability or has special needs, consider
talking with an attorney as to how you can establish a third-party supplemental needs trust for your loved one. Life is in full bloom. Spring into action.