The Child

Whether 2 or 82 years old, your child’s welfare is a major concern for you. Your special needs child may be able to maintain gainful employment, but they may not be able to live independently. You want to make sure that they are taken care of for the rest of their lives.  Likely, they receive some sort of government assistance: SSI, SSDI, CDB, TennCare, or Medicare. Without care and planning, good intentions could jeopardize those benefits.

Special Needs Trust

A Special Needs Trust (SNT) is necessary for a person who is receiving or could receive government benefits. To be eligible for benefits, the child must be disabled, have less than $2000 in countable assets, and meet income limits. Sizable gifts can cause that child to lose their benefits. However, the amount of the benefits rarely meets the quality of life standards that a parent wants for their child. An SNT can help.

The SNT can be funded by parents, grandparents, or other family and friends for supplementing the needs of the special needs child. Then the funds can be spent on anything that benefits the child: vacation, computer, hobbies, anything that is for the sole benefit of the child except food and shelter.

Mistakes to Avoid

  • Sibling in charge. Often parents assume that a brother or sister will accept responsibility for the special needs child. Parents leave money for the sibling to care for the child. The problem is
    1. The sibling does not want to be responsible for the special needs brother/sister.
    2. The sibling cannot make objective decisions about the special needs sibling. 
    3. The sibling could be sued or go through a divorce and lose the money earmarked for the special needs person.
  • Outright gifts to the Special Needs person.

Outright gifts or inheritances to the child will disqualify them for government benefits as they will no longer meet the asset and income requirements. Once the money is gone, the child would need to re-qualify for government benefits.

  • Signing over the deed to the house to the Special Needs Person. Parents often think that they can just transfer the house to the special needs child by signing the deed. Then the house and the child will be taken care of. That is not true for the parent or the child. A gift for less than fair market value disqualifies the parent from receiving TennCare for any nursing home benefits, and the child often does not have the means to maintain the home. It also is an asset over the $2000 limit.

We Can Help

We can walk you through the process of establishing a SNT that is right for you and your family. You and they will be taken care of. We are here to help guide you as you make decisions regarding your estate and long term care planning needs.  Whatever issue is preventing you from developing a more extensive estate plan, please allow Elder Law of Middle Tennessee to assist you in this process.

For more information, contact our Lebanon, TN office at 615-444-3568 and schedule your appointment today.