Recent changes at the federal level now make planning for the financial future of your special needs child easier than ever. A special needs trust is designed to protect property and income belonging to your child and provide that child with income as needed to pay for housing, food, clothing, and similar items, all without jeopardizing the child’s eligibility for state Medicaid benefits. By establishing a special needs trust, parents can both offer financial support to the disabled individual and safeguard the individual’s Medicaid eligibility. Medicaid coverage is often crucial to meeting the disabled individual’s medical care and needs.
Up until now, only a family member or guardian could establish a third party special needs trust as part of its comprehensive estate plan. Now, however, a disabled individual can establish his or her special needs trust without relying on anyone else. A first-person special needs trust is also referred to as a Medicaid payback trust. During the disabled individual’s lifetime, the assets in the trust are excluded as countable assets for the purposes of determining Medicaid eligibility. In other words, no matter how much money or property is in the special needs trust, it doesn’t count when it comes to qualifying for Medicaid, which maintains strict income and asset limits for its participants. Despite this benefit, the special needs trust is required to include a provision stating that at the time of the individual’s death, if there are assets remaining in the special needs trust, they must be applied to any state in which the individual drew Medicaid benefits before going to any of the individual’s surviving family members or heirs.
Planning for the future of your special needs child is a complex process that can involve many different options, including access to Medicaid benefits. By answering some of the questions about how to create an effective and well-funded plan for the future, it is our hope that we can help you create the long-term care and estate plan that is best for you, your family, and especially your disabled child. At Legacy Law Center, we are here to advocate on behalf of all individuals and their families who need help planning for the future, no matter what options you choose. Contact us today at (734) 995-2383, set up an appointment with one of our Michigan long-term care planning attorneys, and discover how we can help you and your family.
© 2017 Legacy Law Center