Watch Vincent J. Russo Legal Correspondent on Catholic Faith Network’s CFN Live! Vincent appeared on…
Watch Vincent J. Russo Legal Correspondent on Catholic Faith Network’s CFN Live!
Vincent appeared on CFN Live on March 30th to discuss “Protecting Your Child with Special Needs (the Supplemental Needs Trust)”
Colleen: Vincent, welcome back to your four-part series on Trusts and Medicaid. Can you briefly sum up the first three parts?
In the first two parts, I focused on how seniors can protect their assets and income by using certain types of trusts (the Medicaid Asset Protection Trust and the Pooled Income Trusts) while accessing Medicaid long-term care services.
In the third part, I focused on how an individual under age 65 can protect their assets while accessing government benefits by utilizing a First Party Special Needs Trust.
Today, I will focus on how parents can leave assets for a child with special needs in the most protective way.
Colleen: I can imagine that this is one of the most important concerns of a parent – what will happen if I am not there.
Yes, Parents are very concerned about how their child with special needs will live if they should pass away.
This is where the Third Party Supplemental Needs Trust can be most helpful. This type of trust can be funded with the parents’ assets for a child with special needs.
The Trust funds can then be used for the sole benefit of the child while the child accesses Medicaid benefits for medical and long term care services, as well as the child receiving Supplemental Security Income (SSI).
Colleen: What are the key benefits of leaving assets in this type of Trust?
There are three key benefits:
One, providing for your child’s living expenses
Two, Asset Management and Creditor Protection
Two, Maximizing Government Benefits such as Medicaid and SSI.
Colleen: How and when is the trust set up?
The Supplemental Needs Trust can be set up either under a Will when the parents pass away or during their lifetime.
Colleen: Vincent, can you share an example?
Let’s take a common situation.
Parents have two children, John and Mary who has special needs.
The parents want to leave their assets equally to their children.
They do not want to leave assets directly to Mary because she would not be able to manage them and the assets would render her ineligible for Medicaid and SSI.
They also want to place the assets in the most protective way, rather than leave all of their assets outright to John and trust that he will do the right by his sister.
So, they sign a Will which says they when they pass, one-half of their estate will be paid into a Supplemental Needs Trust under their Wills.
The brother or a trusted family member or professional could be Trustee. The income and the assets of the trust can then be used for Mary’s living expenses, supplement her medical care, thus allowing Mary to have the highest quality of life possible.
At the same time, Mary’s medical and long term care can be covered by Medicaid. In addition, she may be eligible for a monthly stipend referred to as SSI – Supplemental Security Income.
Colleen: What happens when the beneficiary passes away, who gets the assets remaining in the trust?
Unlike the First Party Special Needs Trust that we discussed earlier this month, there is no payback to Medicaid. So, the terms of the trust will control who gets the remaining assets in the end.
Colleen: Can you sum up the benefits of the Third Party Supplemental Needs Trust?
The Third-Party Supplemental Needs Trust is the most powerful tool for parents who have a child with special needs. The trust can be arranged so that the parents’ assets can be used to provide for their minor or adult child with special needs while maximizing government benefits such as Medicaid and SSI.
Colleen: Thanks Vincent for your four-part series on Trusts and Medicaid. I am sure many individuals and families have benefitted from the information that you have shared.
For more information on these topics and more, you can download for free our Planning Guides from our law firm website at vjrussolaw.com
Vincent can be found on past CFN Live episodes by clicking here.
- NYS Medicaid Home Care Program Changes
- Estate Planning Basics Part 1: Why do I need an Estate Plan?
- Estate Planning Basics Part 2: What is Included in an Estate Plan?
- Estate Planning Basics Part 3: When and Why do I need to update my Estate Plan?
- Estate Planning for Children with Special Needs Part 1: How do I provide for and protect my child?
- Estate Planning for Children with Special Needs Part 2: What Government Benefits are Available?
- Estate Planning for Children with Special Needs Part 3: What Steps Do I Need to Take for my Adult Child with Special Needs?
- Long Term Care Planning Part 1: “How Do I Pay for Long Term Care?”
- Long Term Care Planning Part 2: “How Can Medicaid Home Care Help Me?”
- Long Term Care Planning Part 3: “How to Qualify for Medicaid”
- What is a Power of Attorney?
- Important Legal Updates
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You can learn more about the Catholic Faith Network and CFN Live by visiting https://www.catholicfaithnetwork.org/cfn-live.
Russo Law Group’s Managing Partner, Vincent J. Russo, is a featured contributor on the Catholic Faith Network’s new show CFN Live. Vincent is the show’s Legal Correspondent. In his segment, entitled “In the Legal Know,” Vincent will keep you abreast of the latest legal developments including elder law, special needs and estate planning — all to help you make informed planning decisions to protect yourself, your loved ones, and your assets.