Special Needs E-Blasts

 

Special Needs News is a monthly e-newsletter that brings you reports of developments and legislation of vital interest to the families of individuals with special needs and their advocates. This newsletter is brought to you by Vincent J. Russo & Associates, P.C.

APRIL 2008

Blackbird Luncheon, April 29, 2008

Blackbird singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise.

When my daughter, Theresa, was born her wings
were broken and the doctors gave us little hope.

Blackbird singing in the dead of night
Take these sunken eyes and learn to see
All your life
You were only waiting for this moment to be free.

Theresa laughed, she cried, she smiled
Late evenings was a special time for us.

Blackbird fly Blackbird fly
Into the light of the dark black night.

Theresa shed light on what life is all about.
She soared even though she was in a wheelchair.

Blackbird singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise

--Lyrics by Lennon and McCarthy

Theresa was our little angel, a gift from God.

So many Blackbirds bring joy into our lives.
So many Blackbirds enjoy life to the fullest.
It is our privilege to help families with their blackbird.
We are all only waiting for this moment to arise!

Join us at our First Blackbird Luncheon on April 29, 2008.
AUTISM AWARENESS: Effective Education for Individuals with Autism and Their Families

Nicole Weidenbaum, M.S. Ed., SAS
Executive Director, Nassau Suffolk Services for Autism (NSSA)

For more information, please contact Sue Tame at 516-683-1717 or visit our website at www.vjrussolaw.com

MARCH 2008

Back Up! Back Up! Back Up!

How many times have you heard this saying? Unfortunately, I did not back up my computer and when it crashed I lost all of the data. Well, it wasn't just data to me - it was my personal information, passwords, and worst of all, family photos. Didn't I know better? Sure I did but I just didn't get around to doing it.

Well, we all know that we need to have a plan in place. Everyone should have a Durable Power of Attorney, Health Care Proxy, Living Will and Last Will and Testament. You need to have a plan in place to take care of and protect your child with special needs.

But do you have a back up? If you are not able to take care of your child in the future for whatever reason, is there a Standby Guardian who can step in on a moment's notice to make personal and financial decisions for your child. If your trustee for your child predeceases you or is unable to act in that role at some point in the future, who will step in? Do you have a back up?

Having a contingency plan for your child with special needs is absolutely necessary. The first step is to have a memorandum of intent which outlines everything your successor should know about your child. In an emergency, your successor can step in with the knowledge that you have provided to them about your child and your wishes.

If a Supplemental Needs Trust is established for your child, do you have a back up Trustee ready to step in? Have you kept your document up to date to ensure that your successor is still the right person and is ready, willing and able to step in, if necessary?

Backing up is not just for computers! It is for people too!

So, Back Up, Back Up, Back Up!

FEBRUARY 2008

Medicaid Has A Right To Know About...

Jessie has been caring for her daughter, Jane. Years earlier, Jane was in a terrible car accident leaving her severely disabled. When the lawsuit was finally settled, it was critical for the settlement proceeds to be protected.

Jessie was told by a friend that Jane would lose her Medicaid due to the settlement. The local Medicaid agency will treat the settlement proceeds as an available resource which would result in Jane losing her Medicaid coverage. So who would know? Well, Medicaid requires a Medicaid recipient to notify Medicaid of any change in assets which would impact the Medicaid recipient’s eligibility. Failure to notify Medicaid could lead to a fraud investigation.

The key in Jane’s situation is for Jessie to immediately meet with a Special Needs Attorney who can discuss the available options. One option would be for Jessie to establish a First Party Special Needs Trust which would be for Jane’s sole benefit and funded with the settlement proceeds. At the instruction of the attorney, Jane would then notify Medicaid of the settlement, the establishment of the Trust and document how the Trust was funded. It is important that the special needs attorney work with the personal injury attorney so that at no time would Jane’s Medicaid coverage be compromised.

Under the Medicaid rules, Jane would continue to receive her Medicaid since there is no transfer penalty for funding the Special Needs Trust and the assets in the Trust are not considered an available asset for purposes of Medicaid eligibility. Notification does not stop here as there are another set of rules that Jessie must follow as the Trustee. Stay tuned for next month’s e-blast.

JANUARY 2008

Confusion Abounds With SSI - When Food and Shelter Is Provided

Mary is developmentally disabled and lives with her parents, who support her and give her a place to live. They pay for food and clothing so Mary can then use her SSI check for monthly living expenses. But wait, the government says Mary can get help with clothing but any help for room and board reduces her SSI check.

It is difficult to understand. Your child resides in New York and becomes eligible for SSI. You receive an award letter stating your child is going to receive a monthly check in the amount of $724 which consists of a federal amount of $637 and a New York State supplement of $87 (for 2008). Then, there is a reduction of one-third of the federal amount because of “In Kind Support and Maintenance” for household costs. There are 10 items on the list of support and maintenance that are considered household costs.

If Mary does not contribute an amount of her full share of the household costs, there is a reduction of one-third of the federal SSI amount. Mary gets no credit for any monies she contributes if she does not pay her full fair share. Arguably, if Mary were to pay her fair share of the rent and food, then there should be no reduction in her SSI benefit. This can be documented by a rental agreement. A problem arises if the fair market value of room and board exceeds the amount that the recipient could pay, then there will be the one-third reduction.

The tragedy is the SSI benefit does not reflect the cost of living. It is difficult enough to live on $724 per month, for the government to make any reduction in benefits because parents help with room and board. Clothing used to be included in the reduction, thankfully the law was changed. Perhaps we will see additional changes such as food being taken out of the reduction.

For more information on special needs, call 800-680-1717.

Sincerely, Vincent J. Russo

DECEMBER 2007

HERE COMES THE SUN is now coming up on its first anniversary. It is my hope that you have found our e-blast helpful to you and your family.

This past year, I have been inspired by many of you, who are "heroes," for what you do on a daily basis in helping those with special needs. We are fortunate to be on Long Island with the many and varied resources available to us. Not to mention, the hundreds, if not thousands, of grassroots organizations and groups that fill in the cracks each day.

We look forward to a fruitful year in 2008. Our challenge at my law firm is to be responsive and relevant to your needs. Please let us know what we can be do for you, your family and your community.

We are available for free educational programs on special needs planning. Over the past year, I have presented numerous programs to families at UCPN and AHRC Suffolk, to professionals at the New York State Bar Association, Financial Planning Association of Long Island and South Nassau Hospital, to name a few. My law firm is also planning small family workshops focused on Special Needs Planning for 2008. Please let us know if you would like to attend.

Our Theresa Foundation ( www.theresafoundation.com ) is working on a number of exciting projects. We are proud of Theresa's Fun Place at UCPN in Roosevelt (a playground for children with special needs). Perhaps in 2008, we will see a second Theresa's Fun Place on Long Island. That would be great!

Why don't we have a Special Needs Expo on Long Island for people with special needs of all ages? We can make this happen. Let's join forces - if you or your organization is interested, please let me know at vjrusso@vjrussolaw.com. We can make a difference when we work together.

Wishing You and Your Family a Healthy and Happy New Year!

Sincerely Yours,

Vincent

NOVEMBER 2007

The number one concern for all parents is how their children will be cared for should something happen to them. Many younger parents of special needs children are just starting careers and building financial security for the future. They are asking themselves, “Will we have enough assets to provide for the ongoing financial needs of our children?”

For Sharon, her siblings Jane and Beth were pleased to find out that their mother, Sally, had planned for Sharon’s future. Sally had met with a special needs attorney who revised her will to include a Supplemental Needs Trust (SNT) for Sharon. She also purchased life insurance in the amount of $500,000. Sally’s attorney explained to Jane and Beth that the life insurance would fund the SNT for the benefit of Sharon; while mom’s other assets would be split between Jane and Beth.

Sally’s attorney explained further that Jane and Beth would be the Trustees of Sharon’s trust. The funds and any income generated in the Trust could be used to supplement Sharon’s living expenses including her care. These monies could be used to enhance Sharon’s quality of life without adversely affecting her Medicaid Benefits and she would be able to keep her Supplemental Security Income (SSI).

Sally had planned in advance and her children were very grateful. Jane and Beth felt relieved - Thanks Mom.

By planning in advance, your child can be successfully provided for in a protective way. Life Insurance can play a role in ensuring the very best for your child’s future.

We can help you plan to protect the future of your special needs child. For more information on special needs, visit contact us at 800-680-1717.

Sincerely, Vincent J. Russo

SEPTEMBER 2007

Don’t Forget The IRS When Administering A Special Needs Trust

Jack is the Trustee of a Special Needs Trust (SNT) for his daughter, Jamie, who is seven years old. The SNT was funded with two million dollars from a medical malpractice settlement.

The medical malpractice attorney was very supportive to the family during the lawsuit, but once the matter was settled, her job was done. A SNT was established by another attorney in order to maintain government benefits for Jamie in the future.

But no one mentioned to Jack how important it was to understand the income tax consequences of the SNT and the need to make estimated tax payments for Jamie. SNTs are subject to the income tax rules for trusts. A SNT is treated as a “Grantor Trust” for income tax purposes. This means that the income generated by the trust assets is taxable to Jamie. There is a requirement that Jack file federal and state income tax returns for the trust but no taxes would be due. These returns are sometimes referred to as information returns and they let the government know that Jamie will have to report the income on her personal income tax returns.

Jack as Trustee and the parent of Jamie needs to know that (1) Jamie must pay estimated tax payments for the income generated by the SNT even if the SNT does not pay the income directly to her. If she fails to do so, she could be subject to estimated tax penalties; and (2) Jamie must pay income tax based on her parent’s tax rates because of the Kiddie Tax which is applicable to children under age 18 with “passive income.”

Complicated stuff! Without having proper tax counsel, costly mistakes can be made by Jack.

For more information on the Income Taxation of Children with Special Needs, visit our website at www.vjrussolaw.com or contact us at 800-680-1717. We are here to help you.

AUGUST 2007

Don’t Leave Home Without Having One

Mary left her house to go shopping. It was a typical day. While in the grocery store she suffered a massive heart attack and passed away. Her daughter, Kim, was taking vocational training classes at the AHRC Center in her area. Mary’s other two children were immediately contacted. After the funeral, her oldest child, Harry, headed to the attorneys office to discuss what steps needed to be taken. His concern was to make sure that Kim would continue to be properly cared for.

Harry was surprised to learn that his mother did not have an estate plan and there was no Will. The attorney advised him that the children would each inherit one third of their mother’s estate. He was shocked when he was told that the assets would pass directly to Kim which would result in Kim losing her government benefits and that a guardian would have to be appointed to manage Kim’s inheritance. In our experience, we have had these situations and steps can be taken at that time through the Courts to have a Legal Guardian appointed for Kim and a Special Needs Trust created for her benefit. This can be an costly proposition (court and legal fees) and the Court will decide what is best for Kim. There may be a period of time where government benefits such as Supplemental Security Income and Medicaid are lost.

Unfortunately, Mary will not have any input on who the guardian is, the amount to be set aside for Kim and the types of benefits she would have wanted to provide for.

Mary could have controlled these matters and ensured that her desires were carried out by having a comprehensive Last Will and Testament that included a Supplemental Needs Trust for Kim and a statement of who she wanted as Kim’s legal guardian.

For more information on how Wills and Trusts can protect your child, visit our website at www.vjrussolaw.com. We are here to help you!

MAY 2007

Pooled Trusts: A Way to Protect Assets and Income

Sammy, age 22, was in a horrific car accident leaving him with multiple disabilities. Several years later he received a personal injury settlement of $50,000.

Jeanine, age 18, has cerebral palsy and was subjected to medical malpractice at birth. The Court awarded her a settlement of $150,000.

Sammy and Jeanine will both need care for the rest of their lives. All of their assets would be spend down very quickly if they are not able to access government benefits.

A Pooled Trust can provide immediate protection of the assets while allowing people like Sammy and Jeanine to access government benefit programs, such as Medicaid and Supplemental Security Income (SSI).

A Pooled Trust can be used to manage and protect the assets of a disabled person if the trust is funded prior to age 65. These proceeds can be used to supplement Medicaid and SSI benefits. Special people with special needs can keep their benefits and have the assets in the Pooled Trust enhance their lives.

There are many not for profit organizations that maintain pooled trusts. Some of these organizations may have even provided services to the individual with special needs. A separate trust account is set up under the Pooled Trust with the assets of the disabled person

Pooled Trusts are very helpful in providing professional management of the assets. An added benefit of using a Pooled Trust is that the assets remaining at the death of the individual can be left to the organization that maintains the pooled trust, instead of paying back the State for the Medicaid services provided. This enables other people with special needs to benefit from the funds that would otherwise be paid back to Medicaid.

For more information on the Pooled Trusts, visit our website at www.vjrussolaw.com. We are here to help you.

FEBRUARY 2007

trusts that will work best for your situation

When planning for a child or family member with special needs, it's important to know about trusts that will work best for your situation. Special Needs Trusts and Supplemental Needs Trusts allow you to protect assets and provide for a person with special needs.

A First Party Special Needs Trust allows a person with special needs under the age of 65 to protect his or her own assets and income while maximizing government benefits. The Trust must meet certain requirements under Medicaid, such as a pay back provision to the State for Medicaid reimbursement.

For example, Johnny received a $200,000 settlement from a personal injury. He was able to fund a Special Needs Trust with the proceeds. The trustee will be able to use the $200,000 and the income from it for Johnny's needs and living expenses for his lifetime. Johnny will be able to access Medicaid to pay for his long term care.

A Third Party Supplemental Needs Trust allows you to provide for the needs of another person, without affecting their eligibility for various government benefit programs, such as Medicaid. There is no pay back provision required in this Trust.

For example, Sam and Shirley can leave assets in a Supplemental Needs Trust for their daughter, Dawn, who is autistic. The Trustee, Dawn's brother, Frank, can use the trust assets and income for whatever Dawn needs. Dawn will also be able to get a monthly check from SSI and Medicaid to pay for her medical and long term care needs.

Our law firm can develop an action plan which includes the right trust for you and your family.

We offer FREE educational seminars on Special Needs, Elder Law and Estate Planning. Contact Susan Tame at 516-897-7100.

Sincerely,

Vincent J. Russo

 

JANUARY 2007

Starting 2007 in a Special Way

Welcome to our first edition of Here Comes The Sun - News for the Special Needs Community. Our mission is to educate and provide valuable information to families and healthcare professionals caring for adults and children with special needs. Our goal is to help them implement special needs planning.

Each month, Here Comes The Sun will feature the most recent developments in special needs planning, related articles by our staff / guest editors, helpful resources and more. For over 20 years, Vincent J. Russo & Associates, P.C. has represented clients and maintained a successful campaign of local and national advocacy for individuals with special needs and their families. We take pride in being YOUR SPECIAL NEEDS PLANNERS.

As part of our outreach, we are actively involved in several Long Island service organizations including the Long Island Chapters of the Alzheimer's Association and Arthritis Foundation; United Cerebral Palsy of Nassau County (UCPN) and The Theresa Foundation for children with special needs.

In 2006, I co-founded the Academy of Special Needs Planners ( www.specialneedsplanners.com) to connect families with attorneys who are experienced in providing legal guidance and services to enhance the lives of their loved ones with special needs. In March 2007, we will be hosting our First Annual Conference - Taking Special Needs Planning to the Next Level - where we hope to help attorneys across the country improve and expand their practice in special needs.

We offer FREE educational seminars on Special Needs, Elder Law and Estate Planning. Contact Susan Tame at 516-897-7100.

We welcome your comments and suggestions for future issues - info@vjrussolaw.com.

Sincerely Yours,

Vincent J. Russo