Special Needs Fairness Act signed into law by President Obama

Today is a good-news day for people with disabilities who want to set up a Special Needs Trust to preserve their eligibility for critical benefits: the President has signed the Special Needs Fairness Act — S349 — into law. . Since 1993, an applicant or recipient of Supplemental Security Income (SSI) or Medicaid (now MLTSS in New Jersey) has been able to shelter their excess resources by transferring them into an irrevocable, first party Special Needs Trust for their own sole benefit, sometimes called a D4A trust (for the section of federal law that allows this). The thing is, the Trust itself could only be established by the person’s parent or grandparent, legal guardian [with Court permission], or by a Court. This created a problem for individuals who had no parent, grandparent or guardian. Such an individual could not just hire an attorney to prepare the Trust and provide advice on how to fund it. S/he would have to hire an attorney to petition the Court to establish the trust, and it would have to be on notice of interested parties such as next of kin and the State of New Jersey. This was a time-consuming process and would sometimes create problematic delays that would pose a risk for filing an application or maintaining ongoing eligibility.

The new law corrects this gap in the statute. Now, an individual who has disabilities but is otherwise managing his own affairs can establish the trust without going to Court. This certainly recognizes the capability of individuals with disabilities by allowing them to do their planning privately with their attorney rather than publically in court.  Each state has its own requirements for the exact terms of these trusts, within the framework of the federal Medicaid and SSI statutes and regulations, so the Trust needs to be written carefully to comply with the State’s requirements. And it still has to be established and funded before age 65.

For advice and assistance in establishing special needs trusts, call us at …


Going from ACA Medicaid to “Regular” Medicaid Can Be a High Wire Act Without Legal Assistance

New Jersey has a lot of roads to eligibility for Medicaid, and that’s a good thing.  All of those roads are called NJ FamilyCare, and that’s a confusing thing.

Medicaid in New Jersey is provided by five Managed Care Organizations (MCO) now through NJ FamilyCare.  You must choose one to get services, including long-term services and supports (LTSS), which will be coordinated by the MCO care manager.

If you began to receive Medicaid/NJ FamilyCare benefits because you were income- eligible and without other creditable health coverage (in other words, you receive Medicaid through the Obamacare Medicaid expansion), you could lose your Medicaid coverage if you have a change in your modified adjusted gross income (MAGI) or you obtain other coverage (like Medicare). Unless you are eligible for Medicaid through another pathway (called Aged, Blind or Disabled, or ABD) you will lose services.

For example, if a person with limited income and no insurance had an unexpected illness and spent time in the hospital, it is likely that the hospital got the person on Medicaid through Obamacare, enrolled the person in an MCO, treated that person, and then discharged that person to a rehabilitation facility, where long-term care would also be covered.  However, if there is a later increase in income which would allow that person to purchase subsidized insurance, Medicaid will be discontinued and there will no longer be a payor for the nursing facility or other long-term care setting.  Hence, the need to scramble for ABD, which can co-exist with other insurance coverage.

Planning for ABD Medicaid could include:  spending down resources, establishing a Qualified Income Trust for income, establishing a Special Needs Trust for assets, or other planning that could involve a spouse or disabled or minor child.  In the case of a special needs trust, this type of planning must be done before your 65th birthday.

New Jersey’s Medicaid expansion benefit package does include, via federal waiver, MLTSS–so you must always think about how your eligibility category might change and how to maintain the benefits you currently have.  It can be a very difficult process, but we can help–call us at 732-382-6070.

How to create a master plan for the care of your special needs child

If you’ve been caring for your child who has special needs, you have deep personal knowledge of how your child behaves and responds. You know what they like and what they hate. You know what triggers an anxious or distressed reaction. It could be a flavor, a show, a color, or a person.

As an aging parent, you are probably concerned about who will take care of your child when you are gone. Even as a young parent, this could be on your mind. You may be thinking only about your estate plan – what funds should I set aside? Who will mange those for my child? Do I need a Special Needs Trust (SNT)? Who should I designate as the successor guardian in my Last Will and testament? These are critical decisions for you to make. But what about the actual care plan? There are so many details to think about and convey to the person who follows in your shoes.

Who is going to take your place? Can your child stay in the home? Who will live there and oversee the daily routine? Who will take care of the house? How will they know just what your child is like, or what your preferences are? How will they know about the social life and cultural life your child enjoys? If religious practices or weekly rituals are important, does the potential caregiver know about that? Do they know just how you enable your child to participate in these activities? What is the supported decision-making model that you have been using with your child?

The answer is to write up a blueprint for special needs care — a “master plan”. Call it what you like, it is a detailed discussion of the kinds of things just described. Write up the daily schedule, food preferences, clothing preferences. Include names of favored friends and relatives, best-loved teachers and aides, doctors and health care providers, and people who must be avoided. Collect the IEPs, IQ tests and other cognitive evaluations, progress reports, court orders, and medical records. Collect the current Social Security or SSI documents and Medicaid or Medicare proofs. List the doctors and prescriptions. Make requests or recommendations for activities and outings. No detail is too small.

Estate planning is much more than just a Will, trust or power of attorney. It’s about creating peace of mind and a sense of security for your special needs child as well.

Call us for special needs future care planning, and estate planning … 732-382-6070

Family estate planning to protect children with disabilities

When it comes to designing an estate plan there is no “one size fits all” because each family is unique. You may have a young adult child with profound disabilities who will never be self sufficient and will require extensive support. Or you may have a child who is developing a certain degree of independence with work activity or ability to live outside your home despite their physical or intellectual challenges, and you want to make sure that those capabilities are encouraged and supported.

In either of these situations, maintaining eligibility for means-tested governmental programs like SSI, DDD, Section 8 and Medicaid may be vital. Each of these programs has income limits and resource limits. You may want to include a Supplemental Needs Trust in your Will and direct the child’s share of life insurance, IRAs or other inheritances into that trust. Although a general discretionary trust or a support trust may be appropriate for your other children, it could be disastrous for a child with disabilities by causing ineligibility.

Are your parents thinking of excluding the disabled child from their estate plan for fear of disrupting benefits or because they think s/he “won’t need anything other than governmental benefits?” The availability of housing for intellectually disabled NJ residents has dried up. There may be long waiting lists for other services. Nursing or health care services may be limited. A carefully crafted trust can supplement these absent benefits. One option is for your parents to include a supplemental needs trust in their own Wills.

Another option is that you could establish a supplemental needs trust now as an inter vivos  “stand by” supplemental needs trust which can be funded from time to time. You would get an IRS EIN# for the trust and seed it with a minimal amount such as a $100 bank account, You can be trustee for your child, and you can select the successor trustees. Your child’s grandparents can then periodically place gift money into that trust. They could name it as a beneficiary of some percentage of their life insurance policy. They could include a bequest to that trust in their own Will. In this way grandparents can provide funds for the disabled grandchild without creating a trust under their own Will.

See prior post on 9/24/14 and our website for more about SNTs.

Call for appointment concerning estate planning and trusts for special needs … 732-382-6070