Here is another good article about types of trusts for family members with special needs.  If you need help in the Concord NC area, visit me at Insurance Resource Group.

Establishing a Trust for Your Loved One with Special Needs by Bernard Krooks

Most people naturally look to family members when choosing a trustee. However, the individual responsible for a special needs trust has the additional responsibility of planning distributions so that the beneficiary does not lose eligibility for public benefits. Family members may or may not have the necessary skill, time and selflessness to serve as trustee. Therefore, depending on the individual situation, consideration of a professional trustee may be appropriate.

Working through the types of trusts available for your loved one.

In many discussions of trusts, the terms “special needs” and “supplemental needs” are used interchangeably. However, New York state law distinguishes between the two, with a special needs trust being a trust set up for a disabled person with their own assets, and a supplemental needs trust being set up by a third party such as a parent or other family member.

Beyond this distinction, supplemental needs trusts can be divided into three categories.

Third party supplemental needs trusts.

Third party trusts can be established for a person of any age by a parent, family member or friend. This type of trust is a “discretionary” trust established for the benefit of a person with special needs whose disability establishes a long-term need for care. Since it is discretionary, the trustee must be careful how the money from the trust is spent. Upon the beneficiary’s death, any remaining assets will be distributed according to the trust agreement. The government will not have the right to recover anything from the trust.

First party supplemental needs trusts.

This type of trust is also known as a “pay-back” trust, because upon the beneficiary’s death, the remaining funds in the trust can be used by the state to pay back any Medicaid benefits accrued during their lifetime. A disabled person under the age of 65 can establish a first party trust, and they may their own funds without jeopardizing eligibility for benefit programs.

Pooled trusts created by a non-profit association.

Pooled trusts pool the resources of many beneficiaries. A non-profit association then manages the resources. Pooled trusts are significant because they may be established for people of any age. Also, a pooled trust may be established not only by a parent, grandparent, guardian or court, but also by the special needs individual.

The choice of trust, trustee and manner in which funds from a trust should be distributed is complicated, but working through the issues with an attorney will guarantee your loved one will be well cared for.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

Article Source: http://EzineArticles.com/?expert=Bernard_Krooks

Who Will Care For Your Disabled Child After You Have Passed On?

By Daniel P. Elliot

Every new parent-to-be has hopes and dreams for their new baby.  What happens when the birth or delivery doesn’t always fulfill these hopes and dreams? Sometimes these dreams are tempered by reality and the baby may have a disability.  Should the baby be born with a disability, the delivery staff has additional information and guidance to accommodate raising a baby with disabilities.  That is usually where the guidance ends.  What about after they have grown up? What about after the parents have passed on?   These are very scary, but very real questions that need to be asked shortly after the baby is born.

Although this is a worrisome time, feelings can range from anger and depression to joy.  The key is to take it step by step and settle in with a routine.  At this time, thoughts and attention can be focused on the long term future.  One course of action that needs to be taken is to consult with a special needs attorney to formulate a plan should the worst happen.

In the unfortunate event that the disabled child or children are left alone because of a parent’s demise, hopefully there is a will and estate planning has been developed to provide the continuation of the necessary care for the disabled individual.  If there has not been any planning for the special needs of the individual, the state will take the minimum action to attempt to accommodate the individual.  More times than naught, this care is sub-standard and can not provide a nurturing environment for the special needs individual.

An attorney which specializes in estate planning and special needs planning can alleviate all of the worry and concerns of the parents and ensure that their child will be provided for in the environment that is best for the disabled child.  Even though medical care and supervision of a disabled child can be prohibitively expensive, an effective plan doesn’t have to be expensive.  Often times the special needs planning attorney will have insights into providing financial assistance now and for the future.

Without a trust or other special needs planning in place, probate will liquidate all remaining assets to help pay for any needs of the disabled individual.  Again the disabled individual would be left behind in some sort of institution or assisted living environment at best.  This situation can most certainly be improved. The earlier a special needs lawyer is sought out and plan set in place, the better the financial care can be provided after the parents are gone to ensure the continued happiness of their child.

For more information and guidance about family and estate planning for people with special needs, sources of information such as you will find at http://www.specialplanning.net are available in your specific state and local areas.

Daniel Elliott is an independent contractor who authors articles and media on a variety of topics for diverse audiences. WebDrafter.com, Inc. (http://www.webdrafter.com) produces Website design, hosting, and search engine marketing services for many of the clients, industries and markets related to the articles and media authored by Dan Elliott. If you would like Dan Elliott to ghost write or pen an article for you or your company, please contact him with your specifications.

Here is a very informative article I found for planning with a Special Needs Child.  If you have any questions, or need help with special needs planning in Concord NC, visit me at Insurance Resource Group.

9 Critical Mistakes When Planning For A Special Needs Child
By Mark Connell

MISTAKE # 1: DISINHERITING THE CHILD

Many disabled people rely on government benefits to provide food and shelter. If you have been advised to disinherit your disabled child, remember that these public benefits provide no more than “bare bones” basic necessities. Consider establishing a Special Needs Trust to provide for quality of life expenses without interfering with eligibility for public benefits.

MISTAKE # 2: PROCRASTINATING

No one knows when they may die or become incapacitated. Planning ahead for your special needs child is especially important. Your special needs child may never be able to make up for your failure to plan. Other children without special needs can work once they’ve reached adulthood. Your special needs child, on the other hand, may not have that chance. A Special Needs Trust should be put in place NOW to protect your special needs child.

MISTAKE #3: RELYING ON YOUR OTHER CHILDREN

Many people rely on their other children to provide for a special needs sibling from their own inheritances. Siblings of a special needs child often feel responsible for that child. But, what if the child with the money gets divorced? What if the child with the money dies or becomes incapacitated? What if the child with the money is sued? A Special Needs Trust provides assets specifically allocated to your special needs child with clear instructions to your other children. This can lessen the burden on all your children and can encourage a loving and involved relationship between them.

MISTAKE # 4: NOT PROTECTING A SPECIAL NEEDS CHILD FROM PREDATORS
Predators are particularly attracted to people who are vulnerable, such as the young and those with limited capacity. An inheritance through a Last Will and Testament is part of the public record. By using a Special Needs Trust, parents can control who has access to the information about a special needs child’s inheritance. The privacy of a trust can help protect your child and other family members, who may be serving as trustees, from predators.

MISTAKE # 5: POORLY DRAFTED TRUST DOCUMENT

A Special Needs Trust must be designed properly to promote the quality of life for a special needs child without causing that child to be ineligible for public benefits. The State can deny coverage for essential services if the assets in the trust are considered “available” to the special needs child. The trust agreement must be structured as a “spendthrift” or “discretionary” trust. A “spendthrift” or “discretionary” trust gives the Trustee the authority to determine whether or not to make any distributions without limitation.

MISTAKE # 6: NOT INVITING CONTRIBUTIONS FROM OTHERS

An important benefit of creating the Special Needs Trust now is that family and friends can add to the trust. This can be done either through lifetime gifts or through their Last Will and Testament. Some of the options available are naming the trust to be the beneficiary of life insurance policies, annuities or retirement plans.

MISTAKE # 7: CHOOSING THE WRONG TRUSTEE

During your life, you and your spouse will most likely manage the Special Needs Trust. When you and your spouse are no longer able to serve as Trustee, you can choose who will serve as Successor Trustee. You can choose an individual to act as Trustee or you can choose a team of Trustees. For example, you might select a family member as the “distribution” trustee and a professional or institutional trustee as the “administrative” trustee. Also, you can name an Investment Advisor to guide the trustee in making investment choices or a Trust Protector to replace a Trustee who is not taking good care of your special needs child.

MISTAKE # 8: FAILING TO PROPERLY “FUND” THE TRUST

A Special Needs Trust without assets will be useless to your special needs child. Any asset you wish to put into the trust requires a change in the title or ownership of that asset. For example, if you want life insurance or retirement plans to pay into the trust when you die, you must be sure you’ve completed the proper beneficiary designation forms. Or, if you want real estate to be put into the trust, a deed must be executed and recorded

MISTAKE #9: UNNECESSARY “PAY-BACK” PROVISIONS

A common mistake is having a “pay-back” provision in a Special Needs Trust when it’s not required. These “payback” provisions, where the State recovers the money spent on the special needs child, are only required when assets of that special needs child are used to fund the trust. If the money in the trust is all from “third parties”, whatever is left over in the trust can go to other beneficiaries when the special needs child passes away.

If you have any questions, or need help with a special needs child in your family in the Concord NC area, visit me at Insurance Resource Group.

Special Needs Planning-Testamentary Vs Revocable Trusts

by Bernard Krooks

It is important to be aware of situations where leaving money directly to your child with special needs may cause more harm than good. It is difficult to determine whether an individual with special needs will be able to make proper financial decisions for themselves, especially if they have no previous experience doing so. Leaving money directly to a loved one with special needs may cause them to lose public benefits that are currently paying for their daily and medical care. The money you leave in your Will to an heir with special needs will only cover the cost of daily living and medical care for one to three years, on average. After this time, when the assets have run out, your child will need to reapply for government benefits, and may be left with no means to cover medical expenses while they are waiting for their new benefits to take effect.

To avoid these problems, establish a Special Needs Trust which provides supplementary income to your loved one with special needs. The government cannot use this trust against them when determining their eligibility for disability and other public benefits. It is important to know that there is more than one type of special needs trust, and there are distinct advantages to each one. Make sure you choose the right one for your child with special needs.

A Testamentary special needs trust is created in a Will, and becomes effective once the parents or primary caregivers of the child with special needs have passed. Essentially, the Trust is created when the decedent’s Will is probated, and all assets are transferred into the Trust.

A Revocable Living Trust, or Living Special Needs Trust, differs in that in can be established while the parents or caregivers are still living. Assets placed into the trust can only come from people other than the beneficiary of the trust, and they can be accumulated on a monthly or weekly basis throughout the parents’ lifetime.

Your loved one with special needs may profit in several ways from the use of a Revocable Living Trust as opposed to a Testamentary trust. Trustees manage a Revocable Living Trust, which is created separately from a family’s estate for tax purposes. Since this trust is established during a primary caregiver’s lifetime, the trustees are usually the parents. This allows those who know the individual with special needs best to be able to make an organic plan that will grow under the right circumstances.

Another advantage to a Revocable Living Trust is that it establishes a pattern that may be used by future trustees. Parents who, as trustees, write checks for daily and monthly expenses from a Living Trust are showing what types of things will be acceptable expenditures from the Trust when new trustees take over their responsibilities.

Finally, there is the question of medical or other care for the parents of someone with special needs. More than half of the population will spend time in a nursing home or other assisted care facility toward the end of their lifetimes. If parents of a child with special needs find themselves in this situation and have not set up a separate Living Trust, their estate may be drained before their deaths, leaving nothing to be placed in the Testamentary trust.

All special needs planning must be adapted to fit the circumstances of the beneficiary, which will be very different on a case-to-case basis. A Revocable Living Trust allows for the most flexibility and security. Assets can be built up over time, and the Trust will continue without interruption in the event that something unexpected happens to a parent or primary caregiver. An experienced special needs planning lawyer can set up the right trust for you and your loved one.

The aptly named Ending the Medicare Disability Waiting Act of 2009 was recently introduced by Sen. Jeff Bingaman (D-NM) and Rep. Gene Green (D-TX). The bill proposes to gradually phase out the two-year waiting period over the next ten years, so that in 2019 all SSDI recipients will receive Medicare benefits immediately upon qualifying for SSDI.

More than 120 advocacy groups support the legislation, ranging from Mental Health America and the National Disability Rights Network to the ARC of the United States and United Cerebral Palsy. A coalition of these groups issued an open letter to the bill’s sponsors, pointing out that under the current regulations, almost 40 percent of people with disabilities have no health insurance for part of the waiting period, and 24 percent have no health insurance for the entire waiting period.

To read a press release from Sen. Bingaman’s office about the bill, click here.

To read the full text of the bill, follow this link where the article originally appeared: http://www.specialneedsanswers.com/resources/article.asp?id=6092&section=4&state=

If you have any questions about this article, or need help visit Insurance Resource Group.

Elderly nursing home residents are increasingly living alongside young and middle-age people with mental illness, with sometimes tragic results, according to a 50-state investigation by the Associated Press. It appears that in many cases this potentially dangerous trend is a violation of federal law.

Figures that the AP obtained from the Centers for Medicare and Medicaid Services through the Freedom of Information Act show that nearly 125,000 non-elderly adults with serious mental illness were living in U.S. nursing homes in 2008. This is a 41 percent increase from 2002, when nursing homes housed about 89,000 mentally ill people ages 22 to 64. Younger mentally ill people now make up more than 9 percent of the nation’s nearly 1.4 million nursing home residents, up from 6 percent in 2002, the AP found.

The AP concludes that nursing homes have become state “dumping grounds” for the mentally ill. This seems to be happening for a combination of reasons: state mental institutions are closing, there is a shortage of hospital psychiatric beds, and nursing homes have more room because today’s elderly are healthier than the previous generation and because more and more states are encouraging potential nursing home residents to continue living in the community. Also, it can be advantageous for states to place mentally ill people in nursing homes because of quirks in how the federal government pays for mental health services.

Although no government agency tracks violence by mentally ill residents against elderly residents, the AP article cites a number of recent cases, including the one of a 77-year-old Alzheimer’s patient who died when his roommate, a mentally ill man 30 years his junior, allegedly smashed him in the face with a clock radio.

“Sadly, we’re seeing the tragic results of the failure of federal and state governments to provide appropriate treatment and housing for those with mental illnesses and to provide a safe environment for the frail elderly,” Janet Wells, director of public policy for the National Citizens’ Coalition for Nursing Home Reform, told the AP.

The Omnibus Budget Reconciliation Act (OBRA) of 1987 (P.L. 100-203) mandates that patients suffering from mental illness other than dementia cannot be admitted to Medicaid-certified nursing homes unless it is shown that they need the high level of care a nursing home can provide. § 1396r(b)(3)(F) State agencies screen entering patients using a questionnaire called the Pre-Admission. Screening and Annual Resident Review (PASARR). The federal nursing home law also guarantees nursing home residents the right to be free from physical abuse.

To read the Associated Press article, click here.

Sen. Tom Harkin (D-IA) and Rep. Danny Davis (D-IL) recently introduced the Community Choice Act in both houses of Congress. If passed, the bill would greatly expand community services and in-home care for people with special needs who qualify for institutional level care.

Currently, all states have some form of in-home care available through what are known as “Medicaid Waiver” programs, but the programs offer different levels of services and are typically underfunded and under-utilized. According to a press release from Sen. Harkin’s office, the new legislation allows all Medicaid recipients with special needs who currently qualify for institutional-level care to receive that care at home if they choose to do so, regardless of their state’s current waiver program.

The bill addresses key concerns raised by the United States Supreme Court in its 1999 decision, Olmstead v. L.C. In that decision, the court ruled that people with disabilities are entitled to care in the least restrictive setting available. Under the Community Choice Act, states have until 2014 to implement services that provide an institutional level of care in a less restrictive community setting. Once the plan is up and running, Medicaid beneficiaries with special needs could choose in-home care or opt to remain in a more restrictive institutional setting.

Rep. Davis highlighted the reduced cost of most community based services when compared with institutional care, saying “[t]his legislation allows States and consumers to obtain more cost effective long-term services in the most appropriate setting for the individual. Individuals with disabilities will be able to choose between services in an institution or services at home permitting more independence, more dignity and reduced cost.”

To read the full text of the Community Choice Act, click here for the Senate version or here for the House version.

The sponsors of the Community Choice Act are looking for stories from families who have benefited from receiving care in the community rather than in an institution. Click here for more information.

The Social Security Administration (SSA), the agency responsible for administering the SSI program, has a unique definition of income: “any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter.” This means that a beneficiary’s wages are income (luckily, the SSA only counts $0.50 of each $1.00 of wages as income), as are any cash payments, or cash equivalent items like gift cards, that are given directly to a beneficiary by anyone or anything, including a trust. While a beneficiary is on SSI, her monthly income must be lower than the amount she receives as an SSI benefit. If the beneficiary’s income goes over this limit, even by one dollar, she loses SSI, at least temporarily.

Family members who have not consulted with a qualified special needs planner generally learn about these restrictions the hard way. One of the most common scenarios involves a well-intentioned friend or relative giving a person with special needs a large cash gift, typically on a holiday or birthday, that cancels out the beneficiary’s SSI award. Fortunately, the SSA has a specific rule, called the “Infrequent or Irregular Income Exclusion,” that allows for small gifts to SSI beneficiaries.

Here’s how this rule works: During each quarter of the year, the SSA does not count the first $60 of a beneficiary’s infrequent or irregular unearned income, or the first $30 of a beneficiary’s earned income against his SSI award. The SSA defines infrequent income as any payment received from a single source that a beneficiary did not receive in the month before the payment and will not receive in the month after the payment. For example, if a beneficiary gets $30 in July for helping to paint a house, but does not do the work in June or August, the $30 counts as infrequent earned income. Irregular income is any income a beneficiary cannot reasonably expect to receive. In this case, if a friend of the beneficiary gives him $50 “just because,” that $50 counts as irregular income.

In both the house painting example and the gift giving example, SSI would not count the payments as income because the payments fall under the Infrequent or Irregular Income Exclusion. However, if the beneficiary does not spend the funds during the month in which they are received, any remaining money counts as an available resource in the following month, creating a separate problem for the beneficiary, who must keep assets under $2,000 in order to qualify for SSI.

Clearly, $60 each quarter is not a lot of money. But for SSI recipients, who have to deal with many onerous financial requirements, every little bit helps. Of course, there are other, much less restrictive ways to help an SSI recipient with his daily needs, often through the use of a special needs trust. A qualified special needs planner can help you navigate the tricky world of SSI rules and propose solutions that can make an SSI beneficiary’s life much easier. To find a planner near you, click here.

The original article may be found at http://www.specialneedsanswers.com/resources/article.asp?id=6091&section=4&state=

For a planner in the Concord, North Carolina area, visit Insurance Resource Group.

From April 22 – May 5, Harris Teeter stores in North Carolina will sell $1 and $5 donation coupons at checkout lines to support the statewide services of the Autism Society of North Carolina. Please encourage your friends, family, and co-workers to shop at HT and spend a buck or more to help this worthy cause! As an extra incentive if you purchase a $5 donation, you will receive a code for a free redbox DVD rental.

Be sure to thank the Harris Teeter associates for supporting this cause.

www.harristeeter.com

If you have any questions, or need help with Special Needs Planning, visit me at Insurance Resource Group.

The typical donor:
•    Needs assets available during life.
•    Wants to benefit heirs first with an income stream followed by a significant gift.
•    Creates a gift as part of an overall estate plan.

Gifts features and benefits:
•    Full or partial gift or estate tax deduction
•    Flexible estate planning
•    All assets available during life
•    Revocable during life

How Do I Make a Gift of a Testamentary Trust?

Gifts made through a testamentary trust should be structured as part of your overall financial and estate plan. They can be an integral part of your gift planning and also meet the special needs of your heirs. Because these gift types may be complex, you should always involve your legal and financial advisors to implement a workable plan. LDS Foundation’s professional staff is available to counsel with you and your advisors in meeting your goals.

Other Facts You Should Know about Testamentary Trusts

Testamentary trusts often mesh with other aspects of an individual’s overall estate and gift plan. Here are a few related concepts to consider:
Generation-skipping trust is a trust that transfers payment down to grandchildren. For example, a grandmother creates a trust giving income to her children and the trust assets ultimately to her grandchildren. Because she “skipped” her children and passed the property to the next generation, there are special limitations and transfer taxes that should be considered.

Incapacity is the lack of legal ability or power to do something. Examples might be a minor child that does not have the legal right to vote or make contracts, or an intellectually handicapped child that has special needs after you are gone, such as income for life.

Spendthrift trust is a special-needs trust in which a trustee looks after property or other assets on behalf of a person who spends money unwisely. This arrangement protects a person’s property against himself or herself, or against creditors.

Sprinkling trust is a trust that gives the trustee discretion to distribute income to many people at different times. This mechanism is often used to make distributions “as needed” to children or grandchildren for purposes such as schooling or missions.

Will substitutes include devices such as life insurance, joint-ownership of property, trusts, and other devices to partially eliminate the need for a will.

For more information on Planning for Special Needs contact:

Ted B Banther, LUTCF,CLTC
704-792-1204
Insurance Resource Group