Like most people who care for a person with a disability, you probably have many questions about Special Needs Planning. Below, you will find some of the most frequently asked questions that we receive. If you have a particular question that is not listed, please email.
Yes, all professional fees that pertain to setting-up a Special Needs Trust and/or preservation of assets in a Special Needs Trust are tax deductible. This includes, but is not limited to Serenitas Special Needs Planning initial consultation, private fee-based planning and group planning workshops. This deduction is made on the Form IRS 1040 Schedule A - Itemized Deductions. They are classified as miscellaneous itemized deductions and are included with other investment expenses, subject to 2% of your adjusted gross income. It is highly recommended that in addition to this provided information, that you check with your tax advisor to confirm that the expenses being itemized are indeed tax deductible.
For the first time, persons with a disability are enjoying a typical life expectancy. Therefore, many will survive their parents and siblings. For this reason, it is important that families prepare a plan for the care and supervision of their loved one after they are gone, or are no longer able to care for them. Planning is not an option, it is a necessity. How else will future care providers know what your wishes are, and what they are expected to do?
This document enables families and friends to leave assets to provide for the person with a disability. When properly drafted, the assets funding this trust are not considered to belong to the person with special needs. The funds in the trust are intended to be used to supplement what government benefits do not provide. The Special Needs Trust provides protection and management of the assets and avoids termination or reimbursement of government benefits during the person's lifetime.
No. Since the person with special needs cannot have more than $2,000 of assets in their name to qualify for certain government benefits, the Special Needs Trust is essential to hold and protect assets.
The first, Lifestyle, addresses the day-to-day assistance, medical, social, employment and other activity care requirements. Next, Legal Planning that includes Wills, Special Needs Trusts, Guardianship / Conservatorship, and Trustees. The third issue, Financial Needs involves calculating the person’s monthly budgetary needs and how much is required for the Trust to provide lifetime income for care. Identifying assets to fund the trust and projecting the effects of inflation are also a part of this planning. The final item, Government Benefits, identifies the various Social Security and medical benefits including: SSI, SSA, SSDI, Medicare, Medicaid, and military pensions.
Yesterday! Regardless of whether the person with special needs is four months old or 40 years old, planning should be done based on their needs today.
Yes, even though you trust others to use your assets to provide for your loved one, problems can arise that they will have no control over. If assets are left to another person, those assets legally belong to them. The assets are exposed to loss due to lawsuits, creditors, divorce and the death of the holder of the funds. This individual can be named Trustee in the Special Needs Trust avoiding any situations in their life that might jeopardize these assets and provide protection for the person with a disability.
The most important part of any plan is the “Letter of Intent.” It provides all the information future care providers will need to know in order to understand the person with special needs. Details about their abilities, diet, medication, therapy, social activities, mannerisms, etc. are included. If the person requires assistance with the typical activities of daily living, such as bathing, dressing, eating, communicating, etc., it is also recommended that a video be made showing and explaining how to assist the person. The “Letter of Intent” is not a legal document.
No. Every American citizen is an “emancipated adult” when they reach age 18. Anyone, including parents, must petition the courts to be appointed legal guardian. An alternative to legal guardianship is a “Legal and Medical Durable Power of Attorney” in which a person gives another the right to make medical and legal decisions on their behalf at a time when the person is unable. The person with special needs must be able to sign and fully understand this document.
Anyone whom you feel you can trust to fulfill your wishes and provide the best care and attention for your loved one. You can select a relative, friend, financial institution, or charitable organization to serve as a trustee.
For more answers to vexing questions, email us!