Families who have children with special needs have significantly more financial demands than most others. There are medical visits, therapies, equipment, schools, and a host of other things that tax a family’s savings. So when gifts are given by family and friends, it is hugely appreciated. The problem: the gift could jeopardize the child’s financial future. That’s because government benefits like SSI (Supplemental Security Income) and Medicaid, important services the child will need or want throughout adulthood, have a required maximum amount of allowable income resources in order to qualify. That amount for SSI is only $2000. Most often, Medicaid eligibility is based on SSI eligibility so it’s critical that he or she be SSI qualified.

How then can gifts be given without destroying eligibility for benefits? If you are the parent or guardian you must have a special needs trust created in which all gifts and other savings can be deposited. If you are the gift-giver you must make the trust the recipient and NOT the child. You can give as big an amount as you like. When the funds go to the trust and not the child they won’t be counted as the child’s.

This extends to money gifted from a will, legal settlements, and any other financial instrument. The funds must name the trust, and not the person as the beneficiary. Putting assets in an UGMA or UTMA account are not acceptable either. Once the child becomes a legal adult that money will be counted as his or hers.

The funds in the Special Needs Trust can be used for anything that improves the beneficiary’s quality of life. It can go for special therapy, equipments, and caregiving not covered by Medicaid. Books, computers, toys, hobbies, travel can all be purchased as long as they are not already covered by a government program.

I cannot stress enough how important it is to use a knowledgeable special needs trust attorney. There are a variety of trusts, and you must have the correct one for your family situation. For instance, money from a medical settlement may need placement in a different type of trust than money received from an estate. Some people think they can bypass the expense of paying an attorney to set up a trust by letting a friend or relative hold the money. That’s the 3-D mistake! All the money could be lost or taxed away due to that person’s divorce, death, or debt.

Trusts are complex, legal instruments that must be chosen, drafted, and implemented properly. Let the professionals do the difficult part so that giving and receiving gifts will be easy.

If you have a specific question about your situation or would like more information give me a call at 443-756-9281. You can also reach me by email at wgoldband@gmail.com.

Wendy Goldband, MSW, is a Registered Representative and Insurance Producer with an expertise in special needs and long term care planning. She is the former Long Term Care Senior Marketing Manager for Crump Insurance Services, the largest life insurance brokerage in the nation. Author of Breaking Autism’s Barriers and Dangerous Encounters:Avoiding Perilous Situations with Autism, she believes in both the physical and financial safety of your special needs child.

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What happens if you and/or your spouse are injured, disabled, or even meet an untimely death? Who will take over all those daily tasks? How will they know what to do? Where will the money come from to support your child in the manner in which you desire? Even if your family stays in tact till your child turns 18, these same questions still need to be answered. Once a legal adult, eligibility for benefits will be impacted by his or her financial situation. A proper plan today can ensure no benefits are lost and that there are still enough funds and provisions for your adult child to afford a comfortable lifestyle.

It’s critical that you make the time to meet both with an attorney experienced in creating special needs trusts and an advisor who understands the funding of them. That advisor should also be familiar with the other monetary considerations special needs families have. Arranging a team meeting with all your advisors together is ideal.

A few things you can do before you even meet with your advisors:

1. Consider who you might like to be appointed your child’s guardian if you are no longer alive. A guardian generally refers to the person with legal rights to make day-to-day decisions for your child.
2. Consider at least one person you’d like appointed as the trustee. The trustee would have control over how the financial assets are used.
3. Think about who would be your conservator. The conservator is in charge of financial management of those assets.

Last, I urge you to start filling out a Letter of Intent. This is like a personal journal of everything you’d like your babysitter, parents and other potential caregivers to know about the fine details of your child’s daily life. After all, it’s hard enough for you to keep on top of each day — can you imagine a stranger stepping in? You’ll want to record an A to Z list that includes everything from diagnosis and doctors to food preferences and favorite objects. Information like this will go a long way in aiding anyone else helping with care in either an emergency or non-emergency situation.

Make that appointment with your attorney and advisor today! You’ve got to have a plan and you’ve got to have it written down! If everyone works as a team, you can rest knowing your child’s future is secure.

If you have a specific question about your situation or would like more information give me a call at 443-756-9281. You can also reach me by email at wgoldband@gmail.com.

Wendy Goldband, MSW, is a Registered Representative and Insurance Producer with an expertise in special needs and long term care planning. She is the former Long Term Care Senior Marketing Manager for Crump Insurance Services, the largest life insurance brokerage in the nation. Author of Breaking Autism’s Barriers and Dangerous Encounters:Avoiding Perilous Situations with Autism, she believes in both the physical and financial safety of your special needs child.

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