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Park Ridge IL Medicaid and Estate Planning Legal Blog

Monday, May 15, 2017

Financial Steps for Special Needs Planning

Q: What kind of financial planning should I have if I have a special needs child?

While estate planning is important for all parents to safeguard the futures of their children, special needs planning is vitally important for the parents of special needs children.

Unlike in traditional families where the majority of neurotypical children grow up, move out, find jobs, handle finances, and live independently, often in their 20’s, parents of special needs children more often than not live a far different reality. Depending on the nature and severity of the diagnosis of their children, they may not hit any of those typical milestones. Ever. Instead, they may face a lifetime of living dependent on others for supervision or care 24/7.

Because living forever is not an option, special-needs parents need to take steps to provide for the future of their special needs children and their neurotypical children, if any.

A skilled special needs planning attorney can help you navigate the complex issues that arise and fairly and adequately provide for your children's future. And it is never too soon to put that planning in to place.

First, your child may be receiving or be entitled to receive government benefits such as Social Security, Medicare, and Medicaid. It is important to work with an expert in planning how to save for your special needs child "without inadvertently making them ineligible for government assistance". A bank account with as little as $2000 could disqualify your child from certain government benefits. But there are ways to avoid making your child live at poverty levels just to qualify for government benefits.

To bypass these land mines, skilled attorneys create special needs or supplemental trusts into which assets you've marked for the special needs child may be deposited. The assets are shielded in the trust rather than deposited into a personal account in the name of the disabled child --which would likely trigger a loss of government assistance. You would name a trustee, a person who you trust, to control the trust assets and access the money as needed for the benefit of the child. The trustee may or may not be the same person as the caregiver and may or may not be one of your other children.

Through a special needs trust, you can provide for your child to enjoy a variety of life-enhancing expenditures including out-of-pocket medical and dental care, supplemental education, transportation, entertainment, hobbies, recreational and vacation funds, special dietary needs, athletic training, quality of life items (like computers, videos, furniture, electronics, clothes, and more), a personal care attendant , and even the purchase of a vehicle.  So, a special needs trust allows you to provide your child with a comfortable life above the level of destitute living many government programs would otherwise dictate.

Recently, Achieving a Better Life Experience (“ABLE”) accounts enable parents to set some money aside for the future needs of their special needs children. There are limitations and restrictions, but ABLE accounts function in a manner similar to a college savings plan in that money from the account can be withdrawn tax-free if used for qualified expenses. ABLE accounts are simple, inexpensive, and don't require an attorney to set up. They are a nice complement to the protections available in a special needs trust.

If you have children or other loved ones who are disabled, you worry about them and their future. We understand that. Get the peace of mind special needs planning can bring by calling the Law Office of Thomas J. Hanson at 847-423-8033 for a consultation. From our offices in Park Ridge, we represent clients throughout Illinois.

Thomas J. Hansen, LTD. assists clients in Park Ridge, Cook County, IL as well as Niles, Des Plaines, Glenview, Norridge, and Rosemont.

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