| c |
SPECIAL NEEDS TRUST CAN BOOST QUALITY OF LIFE
An
article by: Attorneys David
H. Ferber and Edward D. Beasley
All young parents wonder how their children will be cared for in the
event the parents die prematurely. This fear dissipates as the children
age and become more independent. For the parents of a child with disabilities,
however, the fear never goes away. What will happen to the child with
Down's Syndrome, muscular dystrophy, MS, or other serious disability?
How will they be cared for after the death of their parents?
Our society has developed programs that provide basic food, shelter
and medical care, such as Supplemental Security Income (SSI) and Medicaid.
Where we have fallen woefully short, however, is in the provision
of amenities, or "extras," that will enhance the quality of life.
Who will provide the trips, the music, the Christmas presents, the
extra warm winter coat, or the clothes that are stylish, instead of
merely practical? Who will take the child out to dinner on his birthday?
For the child with disabilities, especially one who does not live
with his family, these are the things that can make life special.
Most parents wish to provide equally for their children, and simply
give the child with disabilities his share of the estate. This type
of direct gift, however, will not provide the child with the special
things he needs, but will have the opposite effect. If such a child
receives an outright gift through a will or a trust, the child will
lose eligibility for most public benefits programs.
Since the child now has assets of his own, he will no longer be eligible
for SSI, Medicaid, and other public programs. The inheritance will
have to be "spent down" on basic food, shelter and medical care until
there is nothing left. When the inheritance has been exhausted, the
child will become eligible for public benefits once again. Clearly,
such an inheritance will have been wasted, since the money did not
contribute to the child's quality of life.
The solution to this dilemma is for the parents to make a trust known
as a "special needs trust." A special needs trust allows money to
be used to supplement government programs, but not to take their place.
Money set aside in a special needs trust does not have to be spent
down on basic care. Rather, the money is used to provide the "extras"
that children with disabilities so desperately need, and that government
assistance does not provide.
The basic idea behind a special needs trust is that the trustee is
given discretion to use the money to provide the amenities that enhance
the child's quality of life, and is prohibited from using the money
for basic food, shelter and medical care that the government provides.
Usually, a brother or sister of the special needs child acts as trustee.
Recognizing that these persons may not have experience in using money
to care for their disabled brother or sister, the trust can provide
detailed instructions or suggestions as to use of the money. For example,
the trust can suggest that the trustee visit the beneficiary periodically,
speak with his counselors, arrange for extra medical care, and evaluate
his recreation and leisure needs. The trustee can also hire social
workers and therapists with experience in the disability in question.
The trust also needs to contain a provision safeguarding the money
from the beneficiary's creditors, and a provision stating where the
money is to go on the death of the beneficiary.
For cases in which a brother or sister is not an appropriate trustee,
parents may be able to take advantage of the "pooled trust" concept.
With a pooled trust, a charitable organization acts as trustee, "pooling"
contributions for many families.
In addition to providing for children with disabilities, a special
needs trust can be used to help individuals who have received personal
injury awards. The award is placed into a special needs trust, and
is used to provide amenities of life. Without a trust, the personal
injury award would have the same effect as an inheritance; i.e., it
would disqualify a person from benefits.
In order to protect eligibility for benefits in the personal injury
context, however, the trust has to follow some very technical and
specialized rules recently enacted by Congress.
With a special needs trust, there is no reason a person with disabilities
cannot enjoy an inheritance, just like his brothers and sisters. |
|
|
|
