Special Needs Trust Fairness Act passes!

Forming a first party Special Needs Trust has, up until now, required a parent, grandparent or a guardian to establish the trust. When the original law allowing First Party Special Needs Trusts was passed, it did not contemplate that many disabled people were perfectly capable of setting up their own trusts. Instead, if someone no longer had a parent and was not in need of a guardian, they had to seek permission from the court.

The Special Needs Trust Fairness Act eliminates that requirement. No longer will disabled people without parents or grandparents face lengthy legal proceedings.

The President still has to sign the Act into law, but is expected to do so. Many states will start following the new law immediately, but it is possible that New York, among other states, to seek further approval from the New York legislature before implementing the Act.

New Long Island Special Needs Radio Show

Monday Evenings at 6:30PM EST

Special Needs Long Island is a weekly radio program dedicated to the special needs community on Long Island.  It is a forum where the latest information involving special needs will be provided.  Featured guests are from special needs organizations, professionals practicing in the field, families and individuals with special needs. The program is hosted by Jeff Silverman, Director of Special Needs Planning for the Center for Wealth Preservation in Syosset, New York. He can be reached by e-mail at [email protected] or at (516) 682-3363

Tonight’s Special Guest is Me!

Join “Special Needs Long Island,” the radio program focused on the Special Needs Community, as we interview special needs planning attorney Ellen Victor, Esq., this Monday, October 11 at 6:30 p.m!

Questions can be called into Ellen during the show at (631)888-8811.

Ellen is uniquely qualified to answer your questions, as a special needs attorney (http://www.victorlawfirm.com/), blogger (http://longislandspecialneedslawyer.com/), and mother of a special needs child.

Here’s your chance to ask your special needs question of an attorney who focuses on this area of the law — for free.

Questions like:

• Why do I need a special needs trust?

• How do I choose a trustee for my special needs trust?

•Do I still need an SNT if my child isn’t on public benefits?

So be sure to tune in at 6:30 p.m. on Long Island’s WGBB 1240 AM.  For those out of the local broadcast range, or wanting the best clarity, the program is simulcast on the internet at www.am1240wgbb.com

Choosing a Trustee for Your Special Needs Trust: Part Two

In Part One of Choosing a Trustee for Your Special Needs Trust, I discussed all the different responsibilities and jobs a trustee must fulfill to properly administer the trust.  It is also important to really assess both the current and potential future needs of your child.

Considerations to Use in Choosing a Trustee

There are a variety of factors that must be weighed and balanced in order to make the best choice possible to manage the Supplemental Needs Trust’s assets while at the same time contribute to the well-being of your special needs child.

  • What is the nature of the disability?
  • How old is the trust beneficiary?
  • Where does the disabled person currently live, and where might that person live in the future?
  • What government benefits is the child with special needs now receiving and what might they become eligible to receive?
  • What is the life expectancy of the disabled person?
  • What is the source of funding of the Special Needs Trust?
  • What skills does the potential trustee have?
  • Are there sufficient funds for the  trustee to be able to hire competent advisers such as accountants, attorneys and caregivers?
  • How available is the trustee to manage both the financial and emotional needs of the special needs child?
  • Are family members a resource to manage either the trust or a trustee?
  • Are non-family members available such as a teacher, family religious leader, an attorney or accountant?  Perhaps you or your child belong to a national organization such as the National Alliance on Mental Illness (NAMI) or the Arc (ARC)?
  • Does the disabled person have a case manager provided by the state, or a care manager provided privately?

Solutions

In Part Three of Choosing a Trustee for Your Special Needs Trust I will offer a number of different solutions to the problem of finding a trustee to administer your trust who meets the qualifications and considerations that are important to both you and your special needs child.

Is Funding a Special Needs Trust a Guessing Game?

How do parents of children with special needs, whether that child is 5 or 35, predict just how much money their disabled child will need for their future comfort?  There are many variables to consider, including:  life expectancy; the rate of inflation; investment return; the amount of benefits the government will provide decades from now (although it is fairly safe to assume recipients of Supplemental Security Income (SSI) will never receive enough cash benefits to rise above the poverty level).

Luckily, special needs financial calculators are available free of charge to help you and your estate planning attorney or financial planner determine the cost of providing your child with lifelong support.  Just click on one of the following links to start the process:

Taking the Guesswork out of Funding a Supplemental Needs Trust

Step One:  Assess your child’s future capabilities.  This is more difficult if your child is still young.  Speak to your child’s medical professionals and ask for an evaluation of your child’s prospects, both short- and long-term.  If your child is already an adult, you will already have a better understanding of what his or her needs are now and might be in the future.

Step Two:  Take an inventory of what you already own.  Add life insurance policies, if any.

Step Three:  Identify current and future living expenses and future income sources for your special needs child.  Your disabled child may be able to earn income and contribute financially.  Consider the government benefits and support your child is already receiving or might receive in the future.  If your child is currently living with you, will that child be eligible for subsidized housing?  Will there be gifts and inheritances from other family members?

Step Four:  Place a dollar value on anticipated income and expenses. The online calculators use broad categories such as housing, transportation, medical care, education, or you can use more detailed lists within each category.

Step Five:   Calculate!  Using assumptions about the rate of inflation and your investment returns, you should now have a target to help you plan for your child’s future needs.

Working Towards Your Goal

Although many of these questions are very difficult for parents to consider, and very difficult to answer, beginning the process of planning for the future security of your loved ones will make you feel more secure now.

As always, if you have any questions about this post, please feel free to either call or contact me through  the contact or comments form.

How Life Insurance Can Help Your Special Needs Child

Many parents are concerned about how they can fund a supplemental needs trust, especially in these rough economic times.  Parents are also concerned about how their other children will feel if they divide their estate assets unevenly, providing more for their siblings with disabilities.  These siblings might have even more resentment if they end up being financially responsible after you are no longer able to supplement your special needs child’s benefits.  Children with autism have a normal life span and could easily need financial assistance until they are well into their 80s!  Additionally, they may need to pay for care that you are no longer able to provide, such as a care manager or help with cleaning and shopping.

Parents with a disabled child should consider buying life insurance to wholly or partially fund the special needs trust.  There are several types of insurance to consider.  Term life is the least expensive option, but the premiums increase each year as the insured (that’s you) gets older.  Since these policies need to be renewed, at some point these policies are typically dropped due to the steep increases in premiums as you age or experience health issues.  There are several types of permanent life insurance including whole and universal.  The least expensive option is known as survivorship or second-to-die life insurance.  This term policy is payable only upon the death of the second insured, when it is most needed.  It is best to consult a life insurance agent with expertise in this area.

If you have any questions about this post,  please feel free to call or drop me a line on either the comment or contact form.