The Importance of Maintaining a Special Needs Plan

By Ronald A. Fatoullah, Esq. and Eva Schwechter, J.D.

{4:31 minutes to read} Anyone who has a family member or loved one with special needs can appreciate the importance of meeting with an attorney and establishing an appropriate plan. However, as we all know, circumstances change! It is also important to stay in close contact with your attorney throughout your life. In case you haven't thought of checking in with your special needs planner in a while, here are five events that should trigger an immediate call to your attorney.

1) A Family Member with Special Needs is Turning 18

Once a child with special needs reaches the age of majority, parents will no longer be able to make many of the decisions that they were able to make for him during his childhood. A special needs planner can discuss various options to help families through this transition, including the preparation of a health care proxy and a durable power of attorney, to the extent the individual with special needs has the requisite capacity. If the individual is deemed to lack capacity, an attorney can guide the family through the process of guardianship. The timing of these processes is extremely important and should be discussed well in advance of the individual reaching the age of majority. An attorney can also help determine whether a first-party supplemental needs trust or third-party supplemental needs trust is the right tool for the individual with special needs, to protect his assets while maintaining his government benefits.

2) A Person with Special Needs Moves to Another State

Although some federal benefit programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), are governed by federal rules, there can be smaller details that apply at the state level. For example, there are usually significant variations in how state Medicaid programs are run. Therefore, if a person with special needs moves to another state, it is important to speak with an attorney who is familiar with local rules and programs.

3) A Person with Special Needs has a Change in His Financial Situation

If the family member with special needs has a significant change in income, whether an increase or a decrease, the special needs plan is probably going to require change. For instance, a change in income means that the method for funding a special needs trust may need to be completely altered. If the individual's income or another source of funds previously used to fund a trust drastically decreases, it may be time to consider other planning techniques, such as using life insurance to fund a trust in place of other assets.

4) A Parent of a Child with Special Needs or a Creator of a Special Needs Plan Retires, Becomes Disabled, or Passes Away

When the parent of a child who had a disability that manifested while the child was still young retires, becomes disabled or dies, the child may qualify for benefits based on the parent's work record. Additionally, if a person who created a special needs plan dies, that individual's attorney must be contacted to implement the next stages of that plan.

5) A Person with Special Needs has a Change in Health Status

Sometimes, individuals who were previously ill and/or suffered from a disability get well and don't need a restrictive special needs plan anymore. More often, unfortunately, people deteriorate and require additional planning. In all cases, if the beneficiary of a special needs plan dies, there will be a great deal of work to do, including the potential payoff of government liens and the disposition of trust assets or the amendment of a special needs plan. Once again, if the beneficiary's health changes, the plan is going to have to change as well. An attorney can explain all of the available options in case of significant changes.

Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Eva Schwechter recently graduated from Hofstra University School of Law, where she was a member of the Hofstra Law Review. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.