Four Tips on Creating a Special Needs Estate Plan

Blind young man

By: Michael W. Gadomski, Esq.

Public benefits enhance the quality of life for people with disabilities yet eligibility for SSI or Medicaid is based on the financial value of assets the persons possess.  So what if parents or grandparents wish to set aside additional financial resources for a child or adult with a disability while maintaining their loved one’s eligibility for public assistance?

The common solution to this issue is creating a supplemental needs trust (“SNT”) whereby trust assets are disregarded in determining resource eligibility for public benefits.  Before establishing an SNT, the following steps are recommended:

  1. SSI/Medicaid Eligibility – It’s important to have the Social Security Administration determine whether a family member meets the Federal definition of disability for purposes of SSI eligibility.  This benefit is a monthly cash payment that is meant for meeting a person’s basic living needs such as food, clothing, and shelter.  Furthermore, persons with disabilities who receive SSI are automatically eligible for Medicaid.  Therefore, promptly obtaining eligibility for SSI and Medicaid will provide a lasting foundation of support for a family member with a disability.
  2. Home and Community-Based Services (“HCBS”) – New York State Medicaid includes the “Children’s 1915c Waiver” program which provides additional services that are designed to keep children with disabilities living in their homes or in the community.  The program includes communication habilitation, family support and training, prevocational services, supported employment, respite, environmental or vehicle modifications, assistive technology, and transportation.  This wide array of services offers an additional layer of support for addressing a family member’s disability-related needs and we encourage you to contact the NYS Children and Youth Evaluation Services, 1-833-333-2937, to apply.
  3. Special Education – Federal law requires public school districts to evaluate students who are suspected of having disabilities that impacts their learning.  Special education programming and related services is another important source of support because it provides children with disabilities access to an education that is tailored to their individual needs and bridges the transition from school to adulthood.  If a parent or guardian suspects their child has a disability, we recommend submitting a written request for a special education evaluation to your school district’s Committee on Special Education (“CSE”) Chairperson.
  4. Type of SNTSupplemental Needs Trusts take on different forms. An individual, first-party SNT is a trust established for the benefit of a person with a disability by a parent, grandparent, legal guardian, or a court.  In contrast, a pooled SNT is a trust managed by a non-profit association in which a beneficiary maintains a sub-account within a master trust.  Upon the beneficiary’s death, a first party SNT and pooled SNT requires the remaining trust funds either be used to reimburse the State for Medicaid services or be retained by the non-profit for the benefit of other beneficiaries of the pooled trust.  For those families wishing to avoid these “payback” requirements, a third-party SNT may be established by either appointing a non-parent as a trustee or waiting to form the trust until the person with disability turns 21 years of age.

Planning for an individual with a disability requires special knowledge of estate planning rules, guardianship laws and government benefits. If you are a person with a disability or have a person with a disability in your life, please contact one of our Special Needs Planning Attorneys for a consultation to develop an individualized estate and long-term care plan which best fits your needs. We have experience helping clients across New York City, Albany, and many other parts of the state and are ready to go to work for you.