Planning for the future of a loved one with special needs is one of the most important responsibilities you can face in your life. From securing your loved one’s financial stability to ensuring access to vital healthcare benefits, and making sure their rights and interests are protected, thoughtful planning can make all the difference.
Special needs planning is a process that requires a comprehensive strategy that takes into account the current as well as future needs of your loved one. At Garmo & Garmo, we can help you create a special needs plan that caters to your loved one’s needs and is personalized to your family’s unique situation.
Call us today at 619-441-2500 to schedule a consultation with one of our experienced California special needs planning lawyers.
Government Benefits Available for Individuals with Special Needs in California
Supplemental Security Income (SSI)
SSI is a federal program that provides monthly payments to individuals with disabilities, including children, who have limited income and resources. In California, SSI recipients can also receive an additional state supplement through the California SSI/SSP program (State Supplementary Payment). SSI is available for individuals with disabilities who meet medical and financial eligibility requirements.
Medi-Cal
Medi-Cal is California’s Medicaid program which provides free or low-cost health care services for individuals with low income, including those with special needs. Medi-Cal covers a wide range of services, including doctor visits, hospital stays, prescription medications, therapy, and long-term care services.
Regional Center Services
California’s network of 21 regional centers offers services to individuals with developmental disabilities. These services are designed to promote independence and help individuals live in their communities. Services include case management, job training, residential support, therapy, transportation, and assistance with independent living skills.
What is the Best Way to Provide for My Special Needs Child without Losing Government Benefits?
One of the most effective tools for ensuring the care and well-being of your special needs child is the establishment of a special needs trust (SNT). A special needs trust allows you to provide financial support for your child without jeopardizing their eligibility for key government benefits such as Medicaid and Supplemental Security Income (SSI).
How Special Needs Trusts Work
A special needs trust is a legal arrangement in which a trustee is given the responsibility of managing funds for the benefit of your special needs child. The funds in the trust can be used for a wide range of expenses that can improve the quality of life for the beneficiary, including:
- Medical expenses not covered by insurance or government programs
- Therapeutic services and specialized treatments
- Educational and vocational training
- Home modifications for accessibility
- Transportation costs
- Entertainment and recreational activities
Benefits of Special Needs Trusts
Preserving Government Benefits
The most significant advantage of a special needs trust is that it allows your child to remain eligible for government programs such as Medicaid and SSI. Without a special needs trust, any inheritance, gift, or lump sum of money could disqualify your child from receiving these benefits, as most programs have strict income and asset limits. The trust ensures that your child can still receive these benefits while also providing a financial cushion for other needs.
Flexibility in the Use of Funds
Unlike government benefits, which have strict rules on what they can be used for, a special needs trust offers flexibility in how the funds are spent. This allows for a wider range of expenses that can enhance your child’s life, from paying for an attendant or caregiver to funding social activities or hobbies. The trustee has the discretion to use the funds based on your child’s evolving needs, ensuring that the trust remains effective throughout their life.
Protection from Misuse or Mismanagement
A special needs trust is administered by a trustee and the funds are managed according to your explicit wishes, which reduces the risk of mismanagement. This is particularly important if you are concerned about the potential for financial abuse or a lack of understanding about how to manage the funds correctly. The trustee is legally bound to act in the best interests of your child and you can choose someone who is best suited to this responsibility.
Long-Term Care and Financial Security
A special needs trust is a long-term planning tool. It can continue to provide for your child’s needs after you are no longer able to provide care, ensuring that they have financial support well into adulthood. With careful planning, the trust can help provide for your child’s ongoing medical care, housing needs, and personal expenses, ensuring their financial security and peace of mind for you as a parent.
Different Types of Special Needs Trusts
There are different types of special needs trusts, each with its specific benefits depending on your situation:
First-Party Special Needs Trust
It’s funded with assets that belong to the individual with special needs, such as an inheritance or personal injury settlement. This type of trust must be created by a parent, grandparent, legal guardian, or the court and the funds are used for the beneficiary’s benefit. Once the beneficiary passes away, any remaining funds can be used to repay the state for Medicaid benefits provided during their lifetime.
Third-Party Special Needs Trust
It’s funded by assets belonging to a family member or friend, rather than the beneficiary. This type of trust is often used to provide for a special needs child’s future when the parents or others wish to leave money for their care. The funds are not subject to Medicaid payback rules, and the remaining assets can go to other family members or charitable organizations upon the beneficiary’s death.
Pooled Trust
Managed by nonprofit organizations, a pooled trust allows multiple beneficiaries with special needs to pool their funds together while maintaining separate accounts. This is often a poignant option for families who don’t have large sums of money to set aside for a trust but still want to ensure their child’s future care needs are met.
Can I Leave Money for a Family Member Who Can Take Care of My Special Needs Child Instead of Creating a Special Needs Plan?
While it might seem like a simple solution to leave money to a trusted family member to care for a special needs child, this approach involves significant risks and does not guarantee that your child will receive the support they need. Simply passing along funds to a family member without a structured plan in place isn’t the same as creating a comprehensive special needs plan, and it can lead to unintended complications that may harm the child’s well-being and future security.
Lack of Assurance That the Caregiver Will Use the Money Appropriately
Leaving money to a family member with the hope that they will use it to care for your child is not a foolproof strategy. While you might trust this person to act in your child’s best interest, circumstances can change and the caregiver might not always be in a position to provide the level of care you envision.
They might face their own financial challenges or personal issues that can prevent them from managing their money properly. Without legal oversight, there is no guarantee that the funds will be allocated as intended and they could be spent in ways that do not benefit your child.
Unintended Financial and Legal Consequences
Even with the best intentions, leaving a lump sum of money to a caregiver can create unforeseen legal and financial complications. If the family member experiences financial difficulties or legal issues, the funds designated for your child could be at risk.
Without a formal plan, there might be disputes about how the money should be used, leading to potential family conflicts. A special needs trust, on the other hand, ensures that the money is managed by a trustee who is legally bound to use it for your child’s care and well-being.
The Need for Structured, Ongoing Support
The challenges of caring for someone with special needs are complex and long-lasting. Leaving money to a family member without a plan does not provide a sustainable, structured approach to addressing those challenges.
A special needs trust not only offers a way to provide financial support, but also sets up a framework for future caregiving, including appointing a trustee to manage the funds, ensuring the child’s eligibility for benefits, and creating a long-term care strategy that adapts to their changing needs.
Safeguard Your Child’s Future with Our California Special Needs Planning Attorneys
At Garmo & Garmo, we have in-depth experience creating customized special needs plans that can protect your child’s well-being while preserving access to essential government benefits. From establishing special needs trusts to ensuring compliance with complex legal requirements, we are here to guide you every step of the way.
Let our experienced estate planning attorneys help you create a plan that addresses your child’s unique needs and ensures their future is as bright and secure as possible. Call us today at 619-441-2500 or fill out our online contact form to schedule a consultation with a member of our legal team.
