1. Planning for a Loved One With Special Needs Presented By Donald D. Vanarelli, Esq. Certified Elder Law Attorney Charter Member, Academy of Special Needs Planners 2007-2008 NJ “Super Lawyer”

2. What Does Planning Involve? Preserving your child’s financial security and quality of life Preserving your child’s financial security and quality of life Addressing key issues: Addressing key issues: Understanding the role of public benefits Understanding the role of public benefits Making decisions about the future Making decisions about the future Using estate planning/trusts to protect assets Using estate planning/trusts to protect assets

3. Part 1: Understanding Public Benefits

4. Public Benefits at a Glance Financial Benefits Supplemental Security Income (SSI) Social Security (SS) Social Security (SS)& Social Security Disability Insurance (SSDI) Social Security Disability Insurance (SSDI) Not means tested but subject to work credits or parents’ eligibility Not means tested but subject to work credits or parents’ eligibility Means tested: Limited income and assets Means tested: Limited income and assets

5. Public Benefits at a Glance Medical Benefits Medicaid Automatic with SSI Automatic with SSI Must apply for SS/SSDI Must apply for SS/SSDI Medicare After two years of SSDI After two years of SSDI

6. Supplemental Security Income (SSI) Must meet SSA’s definition of “disability” and have limited assets/income Provides monthly income for food/shelter Gateway to Medicaid / in-home support services

7. Social Security (SS) / Social Security Disability Insurance (SSDI) Social Security for individuals: Disabled before age 22 and Disabled before age 22 and With parents eligible based on their work record who are retired, disabled or deceased With parents eligible based on their work record who are retired, disabled or deceased SSDI for individuals with work record Social Security benefits may reduce or eliminate SSI benefits

8. Medical Assistance & Support Medicaid: SSI recipients receive automatically SSI recipients receive automatically Covers “medically necessary” services, equipment, hospitalization Covers “medically necessary” services, equipment, hospitalization In-home services needed to live at home: personal care, housekeeping, cooking, transportation to doctors In-home services needed to live at home: personal care, housekeeping, cooking, transportation to doctorsMedicare: Medical coverage, including doctors, hospital, skilled care Medical coverage, including doctors, hospital, skilled care

9. How Benefits Work Together SSI Medicaid SSDIMedicare

10. Part 2: Making Decisions About the Future

11. Case Study: Nathan Current situation: 18-year-old with autism Lives with mom Income from work programs, SSI, Social Security (from dad who is deceased) Limited personal assets (clothing, tv) Qualifies for Medicaid

12. Case Study: Nathan Future situation: Who will make health care decisions? Who will make financial decisions? Where will he live? How will his medical expenses be paid?

13. What Plan Could Nathan’s Mom Make? Possible Options: Make no decisions/plans Leave money to Nathan Disinherit Nathan Leave money to a future caregiver Establish third-party SNT for Nathan Establish first-party SNT for Nathan

14. Part 3: Creating an Effective Plan for Your Child

15. What Steps Should You Take Today? Step 1: Envision Your Child’s Future Planning ahead makes a difference: Planning ahead makes a difference: Where and with whom will your child live? Where and with whom will your child live? What type/level of care will be required? What type/level of care will be required? Will a guardian/conservator be necessary? Will a guardian/conservator be necessary? Who else will be involved? Who else will be involved? What kind of lifestyle is desired? What kind of lifestyle is desired? What unforeseen challenges could arise? What unforeseen challenges could arise?

16. Lays out goals/expectations: Details preferences, needs, wishes, both medical and personal Details preferences, needs, wishes, both medical and personal Lists key people in child’s life Lists key people in child’s life Helps guide: Family members Family members Trustees Trustees Caregivers Caregivers Others Others What Steps Should You Take Today? Step 2: Create a Memorandum of Intent

17. Monthly income: SSI, SSDI, Social Security, earned/unearned income SSI, SSDI, Social Security, earned/unearned income Monthly living expenses: Housing, food, transportation, medical, recreation, etc. Housing, food, transportation, medical, recreation, etc. Consider how any shortfall will be met Consider how any shortfall will be met What Steps Should You Take Today? Step 3: Estimate Income & Expenses Income - Expenses = Shortfall

18. Provides supplemental funds for living expenses not covered by other income sources May be established by parents: Through will Through will Through living trust Through living trust “Living” SNT lets others contribute Trustee has discretion over distributions What Steps Should You Take Today? Step 4: Utilize a Third-Party SNT

19. The SNT Trustee Responsibilities What are the trustee’s responsibilities? Invests/manages assets Invests/manages assets Distributes funds Distributes funds Keeps books Keeps books Files tax returns Files tax returns Hires advocates and care managers, etc., as needed Hires advocates and care managers, etc., as needed

20. Selecting an SNT Trustee Who should be the trustee? Parent with professional co-trustee Parent with professional co-trustee Corporate or other professional trustee Corporate or other professional trustee Successor trustee Successor trustee

21. What Parents Should Do Create Memorandum of Intent Calculate future financial need Establish SNT through will or living trust Fund SNT with life insurance Name SNT as beneficiary of accounts, plans, etc. Reduce taxable estate

22. What Your Child Should Do Sign Advance Directives, if legal capacity Have a legal guardian appointed: When child without mental capacity becomes an adult and parents want to maintain legal responsibility When child without mental capacity becomes an adult and parents want to maintain legal responsibility Court appoints legal guardian Court appoints legal guardian

23. What If Your Child Has Assets? Establish a First-Party SNT: Provides funds for living expenses not covered by other income sources Maintains eligibility for public benefits Must be established by parent, grandparent, legal guardian or the court State must be reimbursed from the trust for all Medicaid expenses

24. Get Started Today Understand your child’s eligibility for public benefits. Make plans for the future to maximize public and private resources for your child’s benefit. Make the SNT a key part of your estate plan. Contact a special needs attorney for the assistance you need. Donald D. Vanarelli, Esq. Certified Elder Law Attorney Charter Member, Academy of Special Needs Planners 2007-2008 NJ “Super Lawyer”