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Special Needs Planning FAQs

November 28, 2017, on FAQs |

My disabled child is turning 18, is there anything I need to do?

Special Needs Trust (SNT) is a trust designed for beneficiaries who are physically or mentally disabled and may be eligible for government assistance (SSI, SSDI, Virginia Medicaid, Medi-Cal and other benefits).  Once a child turns 18, even though that child may not be able to physically or mentally care for him/herself, legally a parent does not have the right to make financial or medical decisions for that child.  So, it is important to put a plan in place that allows the parent to continue to care for the child.  If the child is able to comprehend the idea signing documents, he/she can sign a Health Care Power of Attorney and Durable Power of Attorney.  However, if the child is unable to sign the documents then the parent can seek a guardianship.  We even had parents seek guardian and conservatorship for children who work. 

If a disabled person inherits money or receives a windfall, what will happen to government benefits that person is receiving?

Government benefits generally have income and asset limitations.  Therefore, it is important to make sure to utilize SNTs.  If a person is deemed to be disabled before age 26, he/she can have $100,000.00 outside of an SNT.  If the person was never diagnosed with the disability or is diagnosed later in life, then generally the person can have assets of $2000.00.  If a person inherits more than that amount the benefits will stop until the assets are spent down within the limits.  The other alternative is to set up a first party special needs trust or a D(4)(a) trust.  These are known as a payback trust.  For the lifetime of the beneficiary he/she can stay on benefits.  When the beneficiary dies money will be paid back for the amount of benefits used by the beneficiary.  Any remaining trust assets can go to family.

Can I just leave money to someone other than the disabled child and let them take care of my child?

It is a common strategy to have a responsible adult child take care of the disabled child. However, here are some possible problems with that strategy.  1) The child who inherits the money has creditor problems. 2) The child with the money has his/her own personal challenges that make it impossible for him/her to care for the disabled child.  3) The child with the money dies.  4) The child with the money and the disabled child do not get along.  5) The child with the money doesn’t want to do it.  If any of these things happen, your disabled child is left with only their government benefits.  It is very hard, if not impossible, to live on those benefits. 

If you have questions about SNTs in Fairfax, it’s critical to consult with an experienced special needs trust attorney.  Rhonda will guide you through the process and explain if these types of trusts are in your best interest. Call Rhonda today to schedule a consultation.