Special Needs Planning is a unique area of law that involves planning for the future of loved ones with disabilities. Special Needs Planning addresses the future financial, life management, and medical care of a child or adult living with certain disabilities or conditions.
Mobile Legal Services offers special needs planning services throughout Southeast Michigan. Our attorneys meet clients in their homes, nursing homes, or other convenient locations — for no additional cost — in the Metro Detroit area including Livingston County, Washtenaw County, Oakland County, Wayne County, and Southern Macomb County.
One of the ways attorneys assist families in planning for a family member with special needs is by setting up a Special or Supplemental Needs Trust (commonly referred to as a SNT). A Supplemental Needs Trust can allow for a person with disabilities to receive gifts, inheritances, and other financial assets — which may enhance their lifestyle — without affecting their eligibility for essential government benefits. These benefits may include Social Security Income or Medicaid.
There are two basic types of Supplemental Needs Trusts: a ‘first party’ trust, and a ‘third party’ trust.
A first party trust is often approved by the probate court and is funded with the disabled person’s own money. This can be used when funds are received through a lawsuit, an inheritance, or even if the disabled person had assets prior to becoming disabled. This type of trust can only be established and contributed to prior to the disabled individual’s 65th birthday. A first party supplemental needs trust also requires a payback provision, meaning that when the trust beneficiary dies, if assets remain in the trust, they must be paid back to the State to reimburse the State for payments made to the disabled person during their lifetime.
A third party supplemental needs trust is generally established by a relative or guardian of the disabled person and is funded with other people’s money. This type of trust is beneficial when a family has a member with special needs who they want to leave money to upon their death, but don’t want to compromise the disabled person’s government benefits. These trusts can be a central part of the estate planning process for families of a special needs person, and unlike the first party trust, there is no pay back requirement.
Guardianship proceedings for a person with special needs may also be necessary in order to protect a disabled person’s overall well-being. In Michigan, when a child turns 18, his or her parents no longer have the right to make decisions regarding the child’s finances or health care. Once an individual turns 18, in the eyes of the law, they are deemed to be a competent adult, free to make their own decisions, good or bad. They retain this right until they die or until a court enters an order that says that they are not competent.
If you have a child or loved one with special needs, it is never too early to start planning for their future care and happiness. Please call us today for a free telephone consultation.