One in four Americans has some kind of disability, and an increasing number of children are being diagnosed with some form of autism. Aging parents must plan for the day when their dependent children with disabilities will outlive them as those with disabilities are living much longer today than ever before. For example, the life expectancy for people with Down syndrome has increased from living to age 12 in the 1940s to nearly 60 today. Most children born with cerebral palsy live into their thirties. For parents of these children, it is more important than ever to create a plan and a community, says the article “How to build support system for adult children with disabilities” from The San Diego Union-Tribune.
Financial resources and support services need to be put into place, for when parents are no longer able to provide care. Here are the key points to address:
Preserving the child’s eligibility for government assistance programs, including Supplemental Security Income (SSI) and Medicaid, through the use of a Special Needs trust. Any amount of money can be placed in the trust, and the funds don’t count when determining eligibility. If parents leave money directly to a child, they will lose their ability to get SSI and Medicaid benefits.
Start early. A Third-Party Special Needs trust should be set up before your adult child with disabilities turns 18. It doesn’t need to be funded, but it needs to be created. There are two kinds of Special Needs Trusts: First-Party and Third-Party Special Needs Trusts. The specific type is determined based on the origin of the assets in the trust.
Third-Party Special Needs Trusts are funded with other people’s money. That means that the disabled beneficiary did not fund their trust; instead the money came from parents or grandparents or some other person who loves and cares for the disabled beneficiary.
First-Party Special Needs Trusts, also known as (d)(4)(A) Trusts or Self-Settled Trusts, are established and funded by the beneficiary’s own assets. For a First-Party Trust, the creator must have a disability determination from Social Security. If the disabled beneficiary does not have a Social Security disability determination in place, you need pursue a resolution to this matter quickly.
Learn more about the process of creating Special Needs Trusts and how these play such an integral role in planning for your disabled child’s future in the Parenting Impossible episode, Special Needs Trust Administration.
Be a stickler for the rules. If the child receives SSI, money from the trust may not be used for food and housing, but it can be used for other costs, like therapies that are not covered by Medicaid, or even extras, like a cellphone or vacation. An experienced elder law attorney will be able to help the family with planning and learning the intricacies of these rules.
Name a trustee and a successor trustee. Selecting someone to manage the trust on behalf of the child is a critical decision, and not always an easy one. The trustee should be someone responsible who cares about your child’s well-being. It could be a sibling, if the relationship is good, or a family member. The person should be younger than the parents, so they will be around after the parents have passed.
Open an ABLE Account—Achieving a Better Life Experience account. These are accounts that work in much the same way as a 529 account. They can be established for a disabled person at any time, but the child must have the qualifying disability before age 26. Money from a Special Needs trust can be moved into an ABLE account, and the beneficiary can use it for any qualified disability expense.
Prepare a letter of intent or guidance. This is not a legally binding document, but rather a way of sharing information with others about your child: their preferences, routines, comfort levels and wishes. It can also be used to provide information about caregivers, medical providers and others who are a good fit with your child. You may also wish to share information about what and who they don’t like. Update the letter every year or two.
Power of Attorney. Having a power of attorney for a disabled individual is far more flexible and less costly than a conservatorship or guardianship.
Housing options. Where will your child live? That depends on what kind of disability the child has and the family’s financial resources. Ideally, the child can transition from the family home to another place while the parents are still living. If feasible, the parents could leave the family home to the child in the Special Needs trust, but they’ll also need to leave enough money for ongoing expenses and maintenance of the house. Some disabled adults live in group home settings, where counselors and other staffers help residents live on their own.
This brief list of areas to consider for the future of your disabled child’s life may seem overwhelming. The biggest question you’re likely asking is: How is my kid going to be okay without me? Special Needs Attorney and Advocate Annette Hines helps families answer this question confidently everyday. She created the Special Needs Advocacy & Planning (SNAP) Masterclass to help you become an effective advocate for your disabled family member … by framing the issues and developing your next steps at each level … creating a life plan and course of action for every element of independent living. The course provides the right questions and goals to help you move from overwhelmed, to developing clear answers for the future of your adult child with disabilities. Enroll now and get immediate access to the online course for 12 full months!