Proactive Elder Law & Special Needs Planning

What’s at stake?

At the heart of both elder law and special needs planning is the desire to ensure comfort, dignity and financial security for those we love, whether that means an aging parent, a child or grandchild with developmental disabilities, or, even yourself.

Because the costs of medical care and long-term care are enormous and growing steadily, even well-to-do families often need to avail themselves of government benefits such as Medicaid and Supplemental Security Income (SSI) to provide for their own care or that of loved ones, without exhausting their families’ financial resources.

The legal and financial aspects of elder law and special needs planning are similar, but not identical. Each requires expert guidance to avoid the numerous pitfalls that can await the unwary.

Proactive Elder Law Planning

As the name implies, Proactive Elder Law Planning focuses specifically on providing legal counsel for older clients and their families—before the need for long-term care arises.

It has two main goals:

  • Ensuring that you receive proper and dignified care in the event of physical or mental incapacity; and
  • Protecting your home and other assets from the enormous costs of long-term care in all settings—e.g., nursing homes, assisted living facilities, group homes, or your own home.
Special Needs Planning

Similar to elder law from a planning standpoint, special needs planning generally focuses on children with developmental disabilities such as an autism spectrum disorder or Down Syndrome.

Our practice in this area is focused on helping parents secure their special needs child’s long-term financial support and security by:

  • Safeguarding their child’s eligibility for needed government assistance (e.g. Medicaid and SSI); and
  • Protecting their child’s inheritance and ensuring it is used appropriately for the child’s welfare, enrichment, and quality of life.

Questions you are
or should be asking:

How do I ensure that my aging parents will be provided for?
How do I see to it that there will be enough money to support my disabled son throughout his life?
How can I ensure that the money being set aside to pay for my daughter’s education, therapy, and recreation is used only as intended?

How we can help

Proactive Elder Law Planning

In addition to drafting customized Durable Powers of Attorney and healthcare directives, the focus of our proactive elder law planning practice is creating Irrevocable Medicaid Protection Trusts (a/k/a Irrevocable Income Only Trusts).

Irrevocable Medicaid Protection Trust

The heart of proactive elder care planning is the timely transfer of assets out of your name to avoid Medicaid’s “five-year lookback” provision. (That provision disqualifies persons who have made asset transfers within the five years preceding their application for benefits.)

Some clients’ first instincts are to simply give their assets to their children. However, that course of action carries many unforeseen risks. So we generally recommend placing those assets in an Irrevocable Medicaid Protection Trust instead.

In addition to getting valuable assets (which often include the home, as well as bank or investment accounts), out of your name—which starts the five-year lookback clock ticking—the trust provides the following advantages that a transfer to your children does not:

  • You can retain the legal right to occupy your home—no one can kick you out or charge you rent;
  • You retain all the tax benefits of home ownership (including STAR exemptions, capital gains tax exclusion on sale, etc.);
  • You can sell your home and buy a new one if you wish;
  • You decide when and if an asset in the trust can be given to your children or other persons of your choosing, and you determine what happens to the property upon your death;
  • You can appoint a child or friend as trustee of the trust, either immediately or if and when you become sick or disabled; and
  • The home and other trust assets are sheltered from any troubles your children may have, such as divorce or debts.

[Note: We are also familiar with, and occasionally implement, an elder care financial strategy called the Retained Life Estate Transfer, which involves adding your children to the deed of your home, while ensuring that you can live there for the rest of your life. After your death, your children would become the owners.

We generally recommend an Irrevocable Medicaid Protection Trust instead, because it provides you with more flexibility. For example, under a Retained Life Estate Plan, if you wanted to sell your house and move, your children would have to agree to the sale.]

Special Needs Planning

The focus of our practice in special needs planning is the creation of Special Needs Trusts (SNTs), sometimes called Supplemental Needs Trusts.

Special Needs Trust

When it comes to caring for a special needs child, Medicaid and SSI cover food, shelter, and medical care, at least partially.

Funds held in an SNT are used to supplement (not replace) these benefits. The money in the trust can pay for both necessities and luxuries, such as education, recreational activities, vacations, or any type of care not covered by government benefits.

Assets in a properly crafted SNT do not count against the child for Medicaid and SSI eligibility purposes. Thus, an SNT is the ideal vehicle for gifts, inheritances, and life insurance proceeds.

We work closely with parents and grandparents to ensure that their personal estate plans are designed to coordinate with a Special Needs Trust and provide maximum protection and benefit for the special needs child.

Once we have drawn up the appropriate documents, you’ll be able to rest assured that even if you are unable to care for your special needs child, he or she will always receive the best possible care and financial support.