Recent Study Shows Perils of Not Having a Special Needs Trust Reports New Jersey Special Needs Planning Lawyer
Moorestown, NJ (Law Firm Newswire) November 18, 2011 - New Jersey special needs planning attorney Thomas D. Begley, Jr. presented a teleconference on November 15 about "What's So Special About a Special Needs Trust". The accomplished attorney is part of the Begley Law Group P.C., has co-authored the Special Needs Trust Handbook, and is a regular speaker at national conferences. During the teleconference, he explained how special needs attorneys, estate planning lawyers, and financial advisors can create an even better practice by knowing the latest developments in the special needs development field.
“As an attorney or advisor, you want to be on top of recent developments in the field to give your client and the individual with special needs the best advice to help them access resources and preserve benefits and assets,” said Begley, who is also a founding member of the Special Needs Alliance and its past president.
In a recent Hartford study, more than 62 percent of parents have no plan for their child with special needs and more than half have not set up appropriate mechanisms to leave money to their child or have named them as beneficiaries. “A special needs trust is critical to give them monies to pay for their care and help them enjoy life long after you are gone,” said Begley. “Plus, it can be created to still give them public benefits such as Supplemental Security Income and Medicaid.”
Overall, two types of special needs trusts are available and Begley explained how it is paramount to pick an ideal trustee that understands public benefits, acts in the best interests of the beneficiary, has investment expertise, and understands taxes. Sometimes families hire a professional to do these services or a family member that can be relied on. Trust protectors can also be helpful to monitor a trustee.
Other key issues include the trust’s availability, any transfer penalties subject to the rules of SSI and/or Medicaid, and Medicaid payback provisions that affect a self-settled special needs trust but not a third-party special needs trusts. It is also important to include language in the trust document to define these key issues.
“Drafting Special Needs Trusts: Including POMS Revisions” and the legal implications were discussed in the second half of the teleconference. In this section, Begley highlighted that a special needs trust must take into consideration the Social Security Administration’s Program Operations Manual System (POMS) so that POMS accurately interprets the special needs trust.
Attorneys and advisors can also elevate their role with a special needs individual and their loved ones by also reviewing estate planning options and other considerations. “Being able to give your client the confidence that you are helping them to create a solid financial path for their child with special needs shows that you are able to guide them every step of the way,” said Begley.
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Moorestown, NJ 08057
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- USING SELF-SETTLED SPECIAL NEEDS TRUSTS TO PROTECT PUBLIC BENEFITS
Many public benefits available to persons with disabilities, such as Supplemental Security Income (SSI) and Medicaid, place limits on income and certain types of assets. Exceeding such limits can lead individuals to lose some or all of their benefits. Individuals receiving SSI are limited to $2,000 of assets. For many individuals, their Medicaid is linked to their SSI. Today there are many Medicaid Waiver Programs. In many states the asset limit for these waiver programs is also $2,000, but this varies from program-to-program and from state-to-state. Assets held in ABLE accounts do not affect SSI until the ABLE account reaches [...]
- COMPARISON BETWEEN A DISABILITY ANNUITY TRUST AND A DISABILITY ANNUITY SPECIAL NEEDS TRUST
by Thomas D. Begley, Jr., CELA The chart below is a brief comparison between a Disability Annuity Trust (“DAT”) and a Disability Annuity Special Needs Trust (“DASNT”). Consideration DAT DASNT Typical Grantor Parent/Grandparent Parent/Grandparent Typical Trustee Family Member (Non-Beneficiary) Family Member (Non-Beneficiary) Assets Available Yes No SSDI/ Medicare Yes Yes SSI/Medicaid No Yes Transfer Penalty No No HEMS Standard Yes No SNT Standard No Yes
- CONSIDERATIONS IN DRAFTING A DISABILITY ANNUITY SPECIAL NEEDS TRUST
by Thomas D. Begley, Jr., CELA There are four main issues to be considered in drafting any trust involving a potential Medicaid recipient. These include: Availability; Transfer of asset penalty; Payback provision; and Tax considerations, including income, gift and estate taxes. Let’s examine each of these issues in the context of a DASNT. Availability. The assets in the DASNT would not be available, because the trust would be designed to give the trustee complete discretion with respect to distributions. Standard Third-Party Special Needs Trust language would be used in designing the trust. The standard DAT language would also be included. [...]
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