How Do Special Needs Trusts in New York Mitigate Risk?
All parents should make careful considerations prior to engaging in estate planning. Parents who have a special needs child must take extra precautions and steps in the estate planning process. When a child or a loved one has special needs, you worry about what would happen to them if you were not able to care for them. When you create a Special Needs Trust, you are putting together a plan that ensures your loved one’s needs are met throughout his or her life. Choices you make today can have a significant effect on the future of your loved one, as well as his or her quality of life. While most children in traditional families will grow up, move out, find a job, and live independently, parents of special needs children live a far different reality. Depending on the specific diagnosis of the special needs child, he or she may not hit any of the “typical” milestones, rather may face a lifetime of dependency. Parents of a special needs child must take steps to provide for the future of their child. This requires highly skilled attorneys for Special Needs Trusts in New York.
The complex issues that arise with a special needs child will benefit greatly from speaking to a Davidov Law Group attorney. We understand you want to ensure your child’s future is adequately provided for and it is never too soon to put a plan in place. Your child may be currently receiving—or is entitled to receive—government benefits like Medicaid, Medicare, or Social Security. When you work with a special needs planning expert you can rest assured you will not inadvertently render your special needs child ineligible for government assistance.
Because a bank account with as little as $2,000 could potentially disqualify your special needs child from receiving certain government benefits, your attorney can show you ways to avoid having your child live at poverty levels merely to qualify for benefits. Assets placed in a Special Needs Trust are shielded to protect these crucial benefits, with a named trustee who controls the trust assets, accessing the funds as needed for your child.
What Do Special Needs Trust Attorneys Do?
Our attorneys for Special Needs Trusts can help you ensure your special needs child will receive the benefits he or she needs while securing your legacy. Your attorney will determine what it will take for your special needs child to be eligible for SSI and/or Medicaid or other government benefits. You can name a guardian for your special needs child, as well as a Trustee who will manage and supervise the trust assets. This planning will give you peace of mind, knowing that your loved one will be safe and secure, with housing, food, clothing, and other necessities provided. You will also be sure that the personal and emotional needs of your loved one will be fully met.
What Are the Laws Regarding Special Needs Trusts in New York?
When a Special Needs Trust is established, there are several requirements in the state of New York. The Trustee must have absolute control regarding how trust assets are distributed. The beneficiary cannot demand distributions and is prohibited from revoking or amending the trust. The Trustee should not give cash outright to the special needs individual or the benefits could be jeopardized. There are three types of Special Needs Trusts—a Third-Party Supplemental Needs Trust, a First-Party Special Needs Trust, and a Pooled Special Needs Trust.
- The First-Party Special Needs Trust is funded with the beneficiary’s own assets. This type of trust is used when an individual with special needs is about to receive an inheritance, a settlement, or any funds that will push countable assets over $2,000. The beneficiary of a First-Party Special Needs Trust must be under the age of 65 at the time the trust is funded and disabled under the Social Security Act definitions. This type of trust comes with a Medicaid payback provision requiring reimbursement to Medicaid when the beneficiary dies.
- A Pooled Special Needs Trust is also funded with the beneficiary’s own assets but created and managed by a non-profit organization. Assets in the trust are pooled for investment purposes but managed as a sub-account. This type of trust is a good option for special needs individuals who have no living parents, grandparents, or legal guardians.
- A Third-Party Special Needs Trust is not funded with assets owned by the beneficiary, rather with assets owned by parents, grandparents, other relatives, or even friends. During the lifetime of the parents, this type of trust can be used for ongoing expenses not covered under government programs. There are no Medicaid payback requirements for a Third-party Special Needs Trust which can be created under a will or created by a living person during his or her lifetime (inter vivos).
What Are Some Common Issues Regarding Special Needs Trusts?
Perhaps one of the most important issues regarding a Special Needs Trust is the designation of Trustee. Parents or grandparents who set up the Special Needs Trust often name themselves as Trustee during their lifetime but must have a successor Trustee named in the event of their death or incapacitation. Obviously, picking a trustworthy person to manage the Special Needs Trust is crucial. In this case, it is even more so because this type of trust largely operates on the honor system. The law does impose a duty on trustees to honestly and faithfully carry out the terms of the trust but there is little court supervision.
The chosen Trustee must understand Medicaid and SSI laws, must be able to care for the beneficiary in a variety of ways, and must have a high level of fiscal responsibility. Perhaps even more important, the Trustee must have a willingness to serve. It is imperative that you carefully and clearly explain the duties to the Trustee so there are no unpleasant surprises for the chosen Trustee. It can be a wise idea to provide a letter to your Successor Trustee that clearly describes his or her duties. A Special needs Trust must always be managed for the benefit of the special needs individual, never in the interests of the Trustee. As a practical matter, you need to choose a Trustee who will likely be around as long as the beneficiary needs the Trust, although you can give the Trustee the ability to choose a Successor Trustee.
How To Select the Best Attorneys for Special needs Trusts to Meet Your Child’s Needs Now and In the Future?
Choosing attorneys for Special Needs Trusts in New York is an extremely important task when engaging in estate planning. Davidov Law Group attorneys provide a depth of experience in Special Needs Trusts, other estate planning tasks, and financial matters that few other firms have. We take a holistic view of planning to ensure the overall effectiveness, believing strongly in strong client relationships. We will always ensure we understand your goals before we begin making recommendations. If you would like a more in-depth explanation of estate planning methods, you can read the book co-authored by law firm spouses Ilana and Michael Davidov—“Keeping it in Your Family—Protecting Your Family and Leaving a Lasting Legacy.”
How Davidov Law Group Will Protect Your Family and Preserve Your Legacy
Having Davidov Law Group attorneys for Special Needs Trusts in New York gives you an advantage when you are engaging in estate planning. We are a family-owned firm with a desire to help other families plan for their own futures. We are immigrants and children of immigrants—living proof of the American Dream thanks to sacrifices made by our parents.
Few firms have the legal and financial expertise we do—we have an in-house Certified Financial Planner/Attorney. If you have questions or would like more information regarding your options, we welcome a chance to speak with you. Our special needs planning lawyers in Nassau County can address the entire spectrum of your loved one’s needs. Contact Davidov Law Group today.