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service animals and airlines

Service Animals & Airlines: New Guidance Issued by DOT

Service Animals & Airlines: New Guidance Issued by DOT

 

Service Animals & Airlines: New Guidance Issued by DOT. There has been a lot of heated debate on the topic of traveling with emotional support animals (ESA), psychiatric service animals (PSA), and traditional service animals. To resolve some of the conflict, the Department of Transportation (DOT) issued a Final Statement elaborating on the department’s expectations and priorities regarding the treatment of passengers traveling with animals.

It is well established that individuals with disabilities are permitted to bring their service animals to most places they choose to go. Businesses are prohibited from refusing entry or service to an individual with a service animal, unless particular concerns are present. The Americans with Disabilities Act (ADA) is probably the law that comes to mind in these situations. It is certainly one law that protects those with disabilities from ill-treatment. But, did you know that the ADA does not apply to the skies? The ADA does not apply to airlines, their facilities, or services – that is where the Air Carrier Access Act (ACAA) swoops in.

Some Basic Comparisons

While the two Acts are quite similar, there are notable differences worth investigation. The DOT oversees the ACAA, which applies to airlines, their facilities, and services. The Department of Justice (DOJ) oversees the ADA, which applies to airports, their facilities, and services.

The DOT regards “any individual who has a physical or mental impairment that, on a permanent or temporary basis, substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment” as an individual with a disability. Correspondingly, according to the DOJ, “[t]he term “disability” means, with respect to an individual[,] (A) a physical or mental impairment that substantially limits one or more major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment […].”

Wild Skies

In recent years, airplane cabins have started to look like menageries – passengers taking full advantage, and sometimes abusing, the ability to take certain animals along for the ride. With the uprising of sketchy online businesses “certifying” run-of-the-mill pets as service animals, or worse, providing doctor’s letters prescribing support animals, airlines began cracking down on the abuse. Airline restrictions became tighter and created questions of disability rights violations. Passengers flooded the DOT with complaints of unfairness and illegality.

In response to the rise of animal-toting airline-passenger complaints about unreasonable airline regulations, the DOT issued a Final Statement elaborating on its expectations and priorities under the ACAA. The statement provides clarification on the permissible and prohibited actions that airlines may take in regulating the in-cabin presence of various types of animals.

Animal Hierarchy

There are four general categories of animals when it comes to disability laws: pets, Emotional Support Animals (ESAs), Psychiatric Support Animals (PSAs), and service animals. In the aerial context, pets are often stored in the cargo hold of the aircraft and require an additional fee to the owner. ESAs and PSAs, are generally permitted in the cabin if certain criteria are met. Service animals are heavily protected and taken very seriously under both laws. Under the ADA, only service animals and some PSAs are protected.

Each Act provides guidance on various service animals, their legitimacy, and limitations. The ACAA establishes what animals are permitted in the cabins of aircrafts, and the ADA established what animals are permitted nearly anywhere else. Both Acts consider dogs and miniature horses to be “common” service animals, where the ACAA expanded the group to include cats as well. The ADA does not recognize any other species of service animal.

“Under the ADA, a service animal is defined as a dog [or miniature horse] that has been individually trained to do work or perform tasks for an individual with a disability.  The task(s) performed by the dog [or miniature horse] must be directly related to the person’s disability.” The ACAA does not have a technical definition within the text of the Act, but the department informally explained, in 2018, that the “DOT considers a service animal to be any animal that is individually trained to assist [sic] a qualified person with a disability or any animal necessary for the emotional well-being of a passenger.” (Note, however, that back-end of this statement contradicts some other provisions of the ACAA on the differentiation between service animals and emotional support animals.)

Both Acts give the highest protection to service animals. The text of the ACAA specifically categorizes service animals separately from ESAs and PSAs, which are lumped together. The ADA considers specifically trained PSAs to be genuine service dogs. The ADA explicitly does not recognize ESAs under the Act, where the ACAA provides them protection. Both Acts recognize the potential need for an individual to require the assistance of more than one service animal; but, the ACAA also permits a disabled passenger one ESA in addition to (up to) two non-ESAs.

Additional ACAA Clarifications

With the exception of snakes, other reptiles, ferrets, rodents, and spiders, airlines cannot categorically prohibit the use of species that are not dogs, cats, or miniature horses. An airline could determine that the particular animal compromises the health or safety of others, and therefore prohibit its entry onto the aircraft, but on a case-by-case basis only. Further, airlines are prohibited from breed bans as well.

Airlines are permitted to require travelers with ESAs and PSAs to: check-in early; provide advanced notice; provide a recent doctor’s note from their treating physician verifying that the individual suffers from a recognized emotional or mental disability, that the presence of the animal is necessary, and lists the provider’s credentials. Airlines are absolutely prohibited from requiring traditional service animal users to check in early, provide advance notice, or provide additional documentation, on flights less than eight hours.

Limited questions are permitted by both Acts when a disability is not obvious or clear. The ACAA permits airline personnel to ask “how does your animal assist you with your disability?” For service animals, this verbal assurance by the handler, in addition to any ID cards, harnesses, etc. must be accepted as evidence that the animal is a service animal. For ESAs and PSAs, the airlines may ask for documentation of vaccination, training, behavior, etc., for the purpose of determining the potential threat to the health or safety of others – but, generally, if the individual has complied with the advanced notice and check-in rules, has their doctor’s note, and does not have an unruly or unusual animal companion, the airline must permit its attendance.

The Long and the Short of It

The ADA protects the disabled on the ground; the ACAA protects the disabled in the skies. The DOJ controls the ADA; the DOT controls the ACAA. The ACAA has carved out additional service animal protections for Emotional Support Animals and Psychiatric Service Animals; the ADA only recognizes traditional service dogs (and miniature horses), including PSAs that have been specifically trained to complete a task for its disabled handler.

Traditional service animals are a familiar and, generally, accepted tool for many disabled people. However, the influx of psychiatric and emotional support critters exposed grey areas that the public was happy to explore. Prior to official guidance from the DOT, airlines and passengers were left without mutually understood limits for the presence and use of these creatures. As passengers pushed the bounds, airlines feverishly fought back with restrictions and refusals. The DOT has now offered airlines and passengers a better understanding of the department’s priorities, permissions, and definitive prohibitions. Both sides now have the explanation needed to better protect their specific interests and rights under the ACAA.

Read more related articles here:

New DOT rule paves the way for airlines to ban emotional support animals on flights

U.S. Department of Transportation Announces Final Rule on Traveling by Air with Service Animals

Also, read one of our previous Blogs here:

Pandemic Pets and Pet Companionship: 7 Benefits/Considerations for Care Coordination and Estate Planning

Click here to check out our On Demand Video about Estate Planning.

 

medicaid trusts

Getting Around the Transfer Penalty for Pooled-Trust Transfers for Individuals 65 Years and Older

Getting Around the Transfer Penalty for Pooled-Trust Transfers for Individuals 65 Years and Older

Medicaid laws can be cumbersome and tricky. Federal statutes set out the framework for certain Medicaid eligibility rules and states can interpret them differently. One such rule can be found in 42 U.S. Code § 1396p(d)(4)(C), which covers transfers to pooled trusts. Based on differing interpretations of this statute, some states impose a transfer penalty when an individual over age 65 transfers funds within the look-back period to a pooled trust; some states do not. Minnesota has the former rule, but in a recent case, did allow a Medicaid applicant over age 65 to transfer funds into a pooled trust without the imposition of a transfer penalty.

In this case, David moved into a long-term care facility. His siblings sold his home. David petitioned a court to transfer his proceeds into a pooled special-needs trust. The court issued an order allowing the transfer. Disbursements from the trust were limited to the sole discretion of the Trustee, and could only be made for items or services not covered by Medicaid. David was 65 years old at the time the funds were transferred to the pooled trust. Because Minnesota penalizes transfers to pooled trusts for folks 65 years and older, David was assessed a penalty period where he wasn’t eligible for long-term care Medicaid benefits. David appealed.

Minn. Stat. § 256B.0595 outlines the prohibition on the transfers of assets, along with the exceptions to the transfer rules. In line with federal rules, it states that a Medicaid applicant can’t give away assets for less than fair market value during the look-back period. If the applicant does, a penalty period is instituted where the applicant won’t be eligible for Medicaid benefits for a certain period of time. Such statute also states that no penalty will be imposed if the applicant shows that he did receive fair market value for the transfer, or he intended to receive fair market value for the transfer.

David argued that he did receive fair market value for his transfer to the pooled trust. The Trustee testified that although he had discretion when making distributions, if he were to deny a reasonable request, it would be in bad faith and thus a breach of contract. Indeed, the expenditures from the trust showed that David received items such as an adaptive recliner, dental work, wheelchair cushions, and fees for guardian services. It was estimated that his pooled trust account would be depleted in two years; David’s life expectancy was roughly 15 years.

A state official testified at the hearing that a transfer to a pooled trust by a beneficiary over age 65 was evaluated as an uncompensated transfer so she didn’t complete any further analysis of the case. The human services judge ruled in favor of the state, stating that because distributions were discretionary, “no ‘reasonable seller/buyer or objective observer’ would consider the exchange to be a transfer for fair market value.” David appealed and the district court reversed, concluding that David indeed received adequate compensation for the transfer in the form of his interest in the pooled trust assets. The state appealed and the court of appeals affirmed the district court’s ruling. The state appealed again and now we have this ruling from the Supreme Court of Minnesota.

The judge here did recognize that Minnesota statues have an age limit for when transfers to a pooled trust will not incur a penalty. However, if the Medicaid applicant is over that age limit, there are other ways to avoid a penalty – by showing that the applicant received, or intended to receive, valuable consideration for the asset. The opinion then goes into an analysis of what valuable consideration means. The state argued that fair market value equates to cash, and valuable consideration is something other than cash but “of equivalent market value”. The state said that David did not have the funds as unrestricted access to cash and also future goods and services should not be taken into consideration when analyzing whether an applicant received valuable consideration for the transfer.

The judge disagreed, saying that “…under the intent exception to the asset-transfer rules, Minn. Stat. § 256.0595, subd. 4(a)(4), we hold that ‘valuable consideration’ means compensation that is approximately equal to the fair market value of the transferred asset.” Also, notably, the court stated that David didn’t have to show convincing evidence that he intended to receive fair market value; instead, he only needed to make a satisfactory showing that he did. The latter is a lesser standard, and the court found that David met that standard. In the end, David’s transfer to the pooled trust at age 65 did not incur a penalty, as he received valuable consideration for the transfer.

This is a huge win not just for David and other Minnesotans who may need to qualify for long-term care Medicaid, but it may just be a win for applicants who live in other states that penalize transfers to pooled trusts for applicants over 65 years of age. Has the Supreme Court of Minnesota paved the way to get around the age limit rule? Possibly so.

Read more related articles here:

Exceptions to Counting Trusts Established on or after January 1, 2000

Supplemental Needs Trusts –Protecting Access to Medicaid, SSI and Other Benefits

Also, read one of our previous blogs at:

Can My Family Benefit From A Special Needs Trust?

Click here to check out our On Demand Video about Estate Planning.

able accounts-special needs

National Special Needs Law Month:  New Rules for ABLE Accounts

National Special Needs Law Month:  New Rules for ABLE Accounts

It’s National Special Needs Law Month, let’s take a look at recent final regulations issued by the Internal Revenue Service (IRS). The new regulations clarify rules regarding ABLE accounts.

ABLE accounts were authorized by the Achieving a Better Life Experience Act of 2014. To be eligible to open an ABLE account, you must be an individual with a significant disability that began before age twenty-six. Such accounts allow those with disabilities and their families to save money in a tax-beneficial way. Contributions to an ABLE account are not tax deductible and are done with post-tax earnings, but withdrawals and investment income earned will not be taxed.

Possibly the best advantage of an ABLE account is that the balance therein will not be a countable resource when applying for needs-based public benefits, such as Supplemental Security Income. There are limits on how much can be deposited into an ABLE account – for 2020, the annual limit for each contributor is $15,000. There are also lifetime caps, set by individual states. Many such lifetime limits are as much as $300,000. Withdraws from the account can be used for any expense that related to living with a disability, including healthcare costs, living expenses, and education.

The final regulations issued by the IRS this month amends 26 CFR parts 1, 25, 26 and 301. The purpose of the new regulations is to provide guidance under section 529A of the Internal Revenue Code, which authorized states to create ABLE account programs. These new regulations finalize two proposed regulations, the first proposed in 2015 and the other proposed in 2019. Here are some key take-aways from the new final regulations:

  • Eligible individuals can make additional contributions to their ABLE account, up to the amount equal to the state’s poverty limit.
  • Funds from qualified tuition programs (529 plans) may be rolled over into ABLE accounts.
  • Contributors who qualify as low income may qualify for the Saver’s Credit.
  • Funds in the ABLE account are included in the designated beneficiary’s estate for estate tax purposes.
  • Distributions after death that are made for outstanding debts for qualified disability expenses, or for the funeral or burial expenses of the designated beneficiary, are not included in the designated beneficiary’s estate.
  • Contributions to an ABLE account, other than a contribution made by a designated beneficiary, is a completed gift for gift tax purposes.
  • A change of a designated beneficiary is not treated as a distribution if the successor beneficiary is an eligible individual and a family member of the designated beneficiary.

ABLE accounts can be a great resource for folks who are disabled, and a great way for their families to be able to contribute in a meaningful way. And with this new guidance, practitioners can be more confident when advising clients about the ins-and-outs of ABLE accounts. Practicing with those who have special needs and their families can be very rewarding. Happy National Special Needs Law Month!

To learn more about ABLE accounts and special needs trusts, watch this on-demand video. Our panel of experts discuss how the POMS allows the special needs trust practitioner to broaden options for many beneficiaries of special needs trusts by tying it to an ABLE Account. Watch now.

Read more related articles at:

ABLE Accounts – Tax Benefit for People with Disabilities

IRS Issues Final Rules For ABLE Accounts

IRS ISSUES FINAL ABLE REGULATIONS

Also, read one of our previous Blogs at:

Special Needs Planning Uses ABLE Accounts

Click here to check out our On Demand Video about Estate Planning.

special needs dad and son

CMS Reacts to Oklahoma Law that Instills Five-Year Waiting List for Those with Special Needs

CMS Reacts to Oklahoma Law that Instills Five-Year Waiting List for Those with Special Needs

October marks the beginning of National Special Needs Law Month! Let’s start celebrating with some good news about an Oklahoma law that is facing criticism and will likely be struck down.

House Bill 2899 was passed in Oklahoma last May and the law took effect July 1. The new law imposed a five-year residency requirement for special needs applicants to be able to apply for in-home and community-based services. Meaning, those with special needs would have to live in Oklahoma for five years before being eligible to apply for these important services.

While a five-year waiting list may seem outrageous, the truth is that Oklahoma already has a waiting list for waiver services for developmental and intellectual disabilities services. The current list has almost 6,000 people on it; the wait time is more than a decade. This new law sought to address the current wait list by imposing a residency requirement.

On June 1, various advocacy groups alerted Centers for Medicare and Medicaid Services (CMS) to the new law and urged CMS to strike it down. In response, CMS sent a letter to Oklahoma stating that they are not permitted to carry out that new law. CMS stated the law is unconstitutional based upon the 14th Amendment, which requires states to treat new residents in the same manner as they do long-term residents. In addition, certain federal regulations prohibit states from denying benefits to a person just because that person hasn’t resided in the state for a given time period.

While disability advocates are praising CMS’s response to the Oklahoma law, it has yet to be seen what exactly Oklahoma will do in response. Will they acquiesce? Or will a legal battle ensue? Hopefully the former.

Add Value to Your Firm with Special Needs Planning
We can’t think of a better way to celebrate National Special Needs Law Month than to educate more attorneys in this practice area. Join us for an upcoming special needs planning event! We have an intro course so you can get your feet wet in one webinar. Or jump in and attend both by registering for the Immersion Camp for the ultimate experience.

Read more related articles at:

Five year residency requirement for Oklahoma developmental disabilities services unconstitutional, federal agency says

Oklahoma residency requirement for disability aid ‘not permitted,’ Medicaid agency says

Also, read one of our previous Blogs at:

Special Needs Trust Options

Click here to check out our On Demand Video about Estate Planning.

 

ALS SSDI

SSDI Waiting Period Eliminated for Individuals with ALS

SSDI Waiting Period Eliminated for Individuals with ALS

By Jill Roamer, J.D., CIPP/US topicIcon Special Needs Planning

SSDI Waiting Period Eliminated for Individuals with ALS. Social Security Disability Insurance (SSDI) is a program that is overseen by the Social Security Administration (SSA). SSDI is funded through payroll taxes, and a recipient is considered “insured” because that individual has a certain amount of work credits to receive benefits. Those work credits are earned by working for a certain number of years and paying into the Social Security trust fund via taxes paid.

After establishing the onset of a total disability, there is a five-month waiting period before the insured individual can receive SSDI benefits. However, there are a few exceptions to this waiting period. The first exception is for benefits for dependents of the disabled individual.

The second exception is for folks who are reinstating prior SSDI benefits. Meaning, the individual received benefits in the past but then went back to work and stopped receiving benefits. If benefits were once again needed due to the same disability, there wouldn’t be the five-month waiting period and the entire application process would not have to be redone.

There is now a third exception to the five-month waiting period for folks with amyotrophic lateral sclerosis (ALS). ALS is also known as Lou Gehrig’s disease. It is a fast-moving neurodegenerative disease that causes the loss of muscle movements and bodily control. Individuals with ALS lose their motor-function abilities, to the point they can no longer breathe on their own.

The legislation allowing for this additional exception to the five-month waiting period was passed late in Trump’s presidency, and was driven by U.S. Senators Tom Cotton of Arkansas and Sheldon Whitehouse of Rhode Island. Senator Whitehouse said “This represents a simple act of humanity for Americans battling a disease that often moves too quickly for the current system. Allowing patients and their families to immediately access the benefits they’ve earned will offer comfort as they confront a difficult diagnosis. Thank you to the tireless advocates and allies all over the country who joined our fight to get this done.”

The theory behind the five-month waiting period for SSDI benefits is that the disability may pass and the individual may be able to return to work. And the SSA only intended SSDI benefits for folks that had a disability that would last longer than one year. However, for many diseases and conditions, there is no cure. A return to work is virtually impossible. In the weeks before the legislation was passed, other Senators sought to broaden the scope of the new law to include other medical conditions. Advocates and leaders are pushing for new legislation that will eliminate the SSDI five-month waiting period for other diseases that have no known cure and have a short life expectancy.

Read more related articles at:

ALS Disability Insurance Access Act Eliminates Waiting Period for Social Security Disability Benefits

Congress Eliminates SSDI Waiting Period for People with ALS

Also, read one of our previous Blogs at:

Special Needs Planning Uses ABLE Accounts

Click here to check out our On Demand Video about Estate Planning.

Special Needs Trusts – What You Need to Know

In general, a trust is created when property or assets are managed by a person or firm for another person’s benefit. The person or entity who manages the trust is known as the “trustee” and is entrusted with the responsibility of making decisions in the best interest of the person who benefits from the trust, known as the beneficiary. Trusts are advantageous because they provide the ability to place conditions on how and when your assets will be distributed when you die, reduce estate and gift taxes, and allow you to skip the lengthy and expensive probate process.

 

Special needs trusts are a class of trusts made specifically for the benefit of those with physical and/or mental disabilities. These differ from the typical trust due to the special conditions that often need to be in place to accommodate the specific needs and lifestyle of the beneficiary of a special needs trust. Another one of the main reasons for having this type of trust is to ensure the beneficiary does not render him/herself ineligible for government benefits due to an increase in assets.

 

Choosing the right trustee for a special needs trust is extremely important and the trustee must be someone you are certain will act in the beneficiary’s best interest after your death. Often, this takes place in the form of a trusted family member who knows the beneficiary and his/her needs. However, if your situation doesn’t allow for this, the court will appoint a third party to manage the trust according to your written wishes.

 

One of the important features of a special needs trust is that the assets in the trust will not be counted toward asset thresholds contained in government programs such as Supplemental Security Income (SSI) and Medicaid. The trustee has complete control over the assets in the trust, instead of the beneficiary. For this reason, government programs such as SSI and Medicaid ignore assets in a trust when determining eligibility. Many people are unaware of this and make the mistake of distributing their assets to a loved one with special needs through a will. This could cause them to exceed the asset limits for SSI and/or Medicaid, thus losing their benefits from these programs.

 

Special needs trust may also be set up to take the proceeds from a legal settlement on behalf of the person with special needs. This is important for the same reason as mentioned earlier, to ensure a windfall does not preclude the beneficiary from receiving government benefits. Also, in the event the person with special needs is the one being sued, the funds in the special needs trust are protected from being paid out in damages.

 

Even if you believe your loved one with special needs will never need government benefits, it is still prudent to consider a special needs trust. Special needs trusts can provide for the unique and specific needs of the beneficiary in ways that other types of trusts cannot. Further, you never know what may happen in the future, especially when you’re no longer around. It may turn out that your loved one needs these government benefits one day and they’ll be glad you provided them this option.

 

Special needs trusts are an excellent vehicle to ensure your loved one with special needs is taken care of in the event of your passing. However, they can be difficult to set up and it is advised that you consult an elder law attorney who will be able to examine your specific situation and make sure your loved one is taken care of for years to come. If you would like to speak with an attorney regarding your situation, or have questions about something you have read, please do not hesitate to contact our office.

 

For More Information on this subject Click here: Guardianship and Conservatorship | Autism Speaks

Special Needs Children turning 18 Years Old -Caregiver.com

Also Read our Previous Blog at :  Estate Planning for Special Needs Family Members

 

 

Family Estate Planning

How Can Estate Planning Address the Troubled Child?

How Can Estate Planning Address the Troubled Child?

Every family has unique challenges when planning for the future, and every family needs to consider its individual beneficiaries in an honest light, even when the view isn’t pretty. Concerns may range from adults with substance abuse problems, an inability to make good decisions, or siblings with worrisome marriages. These situations can be addressed through estate planning documents, says the article “Estate Planning for ‘Black Sheep’ Beneficiaries” from Kiplinger.

How can you prepare your estate, when a problem child has grown into an adult with problems?

You have the option of not dividing your estate equally to beneficiaries.

Disinheriting a beneficiary occurs for a variety of reasons and is more common than you might think. If you have already given one child a down payment on a home, while another has gone through two divorces, you may want to make plans for one child to receive their share of the inheritance through a trust to protect them.

A family member who is disabled may benefit from a more generous inheritance than a successful sibling—although that inheritance must be structured properly, if the disabled person is to continue receiving support from government programs.

No matter the reason for unequal distributions, discuss the reasons for the difference in your estate plan with your family, or if your estate planning attorney advises it, include a discussion of your reasons in a document. This buttresses your plan against any claims against the estate and may prevent hard feelings between siblings.

You can change your mind about your estate plan if your ‘wild child’ gets his life together.

A regular evaluation of your estate plan—every three or four years, or whenever big life events occur—is always recommended. If your wayward child finds his footing and you want to change how he is treated in your estate plan, you can do that.

Your estate plan can include incentives, even after you are gone.

Specific provisions in a trust can be used to reward behavior. An incentive trust sets certain goals that must be met before funds are distributed, from completing college to maintaining employment or even to going through rehabilitation. Many estate plans stagger the distribution of funds, so heirs receive distributions over time, rather than all at once. An example: 1/3 at age 25, 1/2 at age 30 and the balance at age 40. This prevents the beneficiary from squandering all of his inheritance at once. Ideally, his financial skills grow, so he is better equipped to preserve a large sum at age 40.

Trusts are not that complicated, and their administration is not overly difficult.

People think trusts are for the wealthy only or are complicated and expensive. None of that is true. Trusts are excellent tools, considered the “Swiss Army Knife” of estate planning. Your estate planning attorney can craft trusts that will help you control how money flows to heirs, protect a special needs individual, minimize taxes and create a legacy. For families who have one or more “black sheep,” the trust is a perfect tool to protect your loved ones from themselves and their life choices.

Reference: Kiplinger (Dec. 8, 2020) “Estate Planning for ‘Black Sheep’ Beneficiaries”

Read more related articles at:

The Dilemma of Troubled Adult Child Beneficiaries

Estate planning for an Irresponsible Child & Why it is important?

Also, read one of our previous Blogs at:

5 Strategies to Keep Your Heirs From Blowing Their Inheritance

Click here to check out our On Demand Video about Estate Planning.

 

Special Needs Plan

Special Needs Plans Need Regular Reviews to Protect Loved Ones

Special Needs Plans Need Regular Reviews to Protect Loved Ones

Special needs planning is far more detailed than estate planning, although both require regular reviews and updates to be effective. For creating a wholly new plan or reviewing an older plan, one way to start is by writing a biography of a loved one with special needs, recommends the article “Special needs plan should be carefully considered” from The News-Enterprise.

Write down the person’s name, birth date and their age at the time of writing. Include information about favorite activities, closest friends and favorite places. Consider all of the things they like and dislike. Make detailed notes about relationships with family members, including any household pets. Think of it as creating a guide to your loved one for someone who has never met them. This guide will be useful in mapping out a plan that will best suit their needs.

Follow this by writing down what you envision for their future, in three distinct scenarios. A good future, where you are able to care for them, a not-so-great future where they are alive and well, but you are not present in their life and a bad future. You should be as specific as possible. This exercise will provide you with a clear sense of what pitfalls may occur, so you and your estate planning attorney can plan better.

Your plan needs to consider who will become the person’s guardian. You’ll need to list more than one person and put their names in order of preference. Consider the possibility that the first person may not wish to or be able to serve as a guardian and have second and third guardians. Talk to each person to be sure they are willing and able to take on this responsibility.

Next, consider living arrangements. Will your loved one be able to live independently, with regular check ins? Could they live in an accessory apartment with a guardian close at hand? Or would they need to live in a group care facility with an on-site social worker?

A special needs plan usually includes a Special Needs Trust (SNT), with comprehensive details for the trustee. Just as you need multiple guardians, you should also name several trustees. The guardian is responsible for a person and the trustee is responsible for the property.

The question is raised whether a family member or a professional should be the trustee. Having a family member manage the finances is not always the best idea. A professional fiduciary will be able to manage the funds without the emotional ties that could cloud their ability to make good decisions. This is especially important, if the beneficiary has a drug dependency problem, does not have a strong family network or if the estate is large.

Consideration should also be given to having the trustee check in on the beneficiary on a regular basis to ensure that the beneficiary’s needs are being met. The trustee should have permission to make decisions about the use of the trust funds in special circumstances. The trustee will need to be someone who is skilled with managing money and is well-organized and responsible.

Special needs planning is complex, but careful planning will give you the peace of mind of knowing that your loved one will be cared for by people you choose and trust.

Reference: The News Enterprise (Oct. 13, 2020) “Special needs plan should be carefully considered”

Read more related articles at:

Special Needs Plans

Is a Medicare Special Needs Plan (SNP) Right for You?

Also, read one of our previous Blogs at:

Estate Planning For Special Needs Family Members

Click here to check out our Master Class!

special needs parent

Possible Pitfalls for Special Needs Planning for Parents

Possible Pitfalls for Special Needs Planning for Parents

 

Public benefits for disabled individuals include health care, supplemental income, and resources, like day programs and other vital services. Some benefits are based on the individual’s disability status, but others are “needs tested,” where eligibility is determined based on financial resources, as explained in the article “Planning for loved ones with special needs” from NWTimes.com.

Needs testing” is something that parents must address as part of special needs planning, in concert with their own estate planning. This ensures that the individual’s government benefits will continue, while their family has the comfort of knowing that after the parents die, their child may have access to resources to cover additional costs and maintain a quality of life they may not otherwise have.

Families must be very careful to make informed planning decisions, otherwise their loved ones may lose the benefits they rely upon.

A variety of special planning tools may be used, and the importance of skilled help from an elder law estate planning attorney cannot be overstated.

One family received a “re-determination” letter from the Social Security Administration. This is the process whereby the SSA scrutinizes a person’s eligibility for benefits, based on their possible access to other non-governmental resources. Once the process begins, the potential exists for a disabled person to lose benefits or be required to pay back benefits if they were deemed to have wrongfully received them.

In this case, a woman who lived in California, engaged in a periodic phone call with California Medicaid. California is known for aggressively pursuing on-going benefits eligibility. The woman mentioned a trust that had been created as a result of estate planning done by her late father. The brief mention was enough to spark an in-depth review of planning. The SSA requested no less than 15 different items, including estate documents, account history and a review of all disbursements for the last two years.

The process has created a tremendous amount of stress for the woman and for her family. The re-determination will also create expenses, as the attorney who drafted the original trust in Indiana, where the father lived, will need to work with a special needs attorney in California, who is knowledgeable about the process in the state.

Similar to estate planning, the special needs process required by Medicaid and the SSA is a constantly evolving process, and not a “one-and-done” transaction. Special needs and estate planning documents created as recently as three or four years ago should be reviewed.

Reference: NWTimes.com (June 21, 2020) “Planning for loved ones with special needs”

Read other related articles at:

11 Things Special Needs Parents Need to Survive and Thrive

Common Pitfalls When Planning Estates for Families with Special Needs Children

Also, Read one of our previous Blogs at :

Special Needs Guardianship Can Be a Challenge

Click here to check out our Master Class!

 

 

trust

10 Reasons Why You Need A Trust

10 Reasons Why You Need A Trust

 

Christine Fletcher Contributor

If your estate is not subject to estate taxes now, it may be in a few years.

Clients often ask, “Why do I need a trust?” This question comes up even more frequently since Congress passed the Tax Cuts and Jobs Act of 2017, which increased the federal estate tax exemption amount from approximately $5 million per person to $11 million per person or $22 million per couple. Those amounts are adjusted for inflation, so this year the exemption amount is $11.4 million per person.

If you and your spouse have less than $22 million, you may think you can get by with a simple will. Here is why you need more than that.

The tax cuts are temporary. The $11 million federal estate tax exemption amount is scheduled to drop back to the $5 million range in 2026. If your estate is not subject to estate taxes now, it may be in a few years.

Your state matters. Your state may impose its own state estate tax. This is true of Massachusetts which has a $1 million estate tax exemption. If you own real estate in another state, you may be subject to that state’s estate tax laws as well. You should be planning to minimize state estate taxes in all applicable states. (Explore 2019 state estate and inheritance taxes.)

Avoiding probate. If you fund your trust during your lifetime, you will avoid probate. Avoiding probate means your family will not have to go to court to authenticate your will after your death in order to access your assets. This saves time and money.

Planning for incapacity. Another benefit to funding your trust while you are alive is that your successor trustee can access the assets for your benefit if you become incapacitated. If you are in the ICU or a long-term care facility, who will pay your bills and manage your assets? If your trust is funded, the successor trustee can do that. Otherwise, your family may have to go to court to have a conservator appointed to oversee your assets.

 

Limiting children’s access to their inheritance. If you have minor children, you want to make sure their inheritance is overseen by a trustee until they are old enough to manage the monies themselves.

Making lifetime gifts to children. If you want to make a lifetime gift to a child, this is best done through an irrevocable trust to define the child’s access to the funds and to allow you some tax savings.

Protecting beneficiaries from themselves. If a beneficiary has a drug addiction, is a spendthrift or just makes poor choices, having a trustee limits their access to the trust funds.

Divorce happens. If a beneficiary goes through a divorce, a trust could prevent their divorcing spouse from obtaining all or a portion of their monies in a settlement.

Creditor protection. If a beneficiary is in a business or profession that makes her susceptible to lawsuits, having a trust can protect the assets and keep them out of reach by her creditors. Clients with children who are physicians often keep the child’s inheritance in trust to protect from any such judgments.

Preventing bad decisions by a surviving spouse. Do you really want him or her spending your hard-earned money on European vacations with the pool boy or the local cocktail waitress? What if your surviving spouse blows the money on shopping trips leaving your children with nothing? I have seen both situations and they are not pretty. Trusts can prevent these scenarios.

Different trusts serve different purposes. Estate tax savings can be an important part of trust planning, but there are many other facets of trust planning to consider and incorporate into your estate plan.

Read more related articles at :

We Asked Our Experts: Do You Need a Trust?

Understanding the Differences Between a Will and a Trust

Also, read one of our previous Blogs at :

Not a Billionaire? Trusts Can Still Be Beneficial

 

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