Financial Consultant John Caserta shares legal and financial strategies for parents of children with special needs looking for guidence.
Consult an attorney that specializes in estate planning for individuals for with special needs.
An attorney specializing in special needs planning can help create important documents that will protect your child’s eligibility for government and provide for their care. These documents include:
-Last Will & Testament – This is a legally binding document that outlines your wishes after you pass away. One of the most important aspects is designating a guardian to care for the child and a trustee to manage the child’s financial affairs.
-Apply for Guardianship – At the age of 18, a person in CT is legally considered an adult capable of making their own decisions. If you your child will require a guardian after the age of 18, you can petition the probate court 180 days prior to their 18th birthday to become a guardian.
-Letter of Intent – While this document is not legally binding, it is critical to providing a life care plan. It can help any caregiver or guardian understand important information about your child such as:
· Medical history
· Family history
· Your child’s likes and dislikes
· Your wishes for the type of care and environment to be provided for your child
Special Needs Trust – The Special Needs Trust (SNT) protects the child’s eligibility for government benefits from Social Security and Medicaid. Without a trust, any child with assets over $2,000 can be disqualified from those government benefits. And in Connecticut, a child is not automatically eligible for Medicaid if they are eligible for Social Security.
Consult an accountant to make sure you qualify for tax deductions such as:
– Medical expense deductions
– Contributions to a 529A or ABLE Account – 529A accounts combine the elements of a special needs trust and a 529 plan and are for people who became disable before age 26. The money can be used tax-free to improve the health and quality of life for a disable individual.
-Child and dependent care credits.
-Consider eligibility for government benefits.
The Social Security Administration offers two assistance programs including:
– Supplemental Security Income (SSI) – This program provides income for individuals with disabilities that fall below a certain income.
– Social Security Disability Insurance (SSDI) – This program provide income benefits for people who have work history and have been unable to work for a minimum of a year.
– Additional programs include housing assistant, educational and vocational training, and nutrition assistance.
– Medicaid – In CT, you’re not automatically eligible for Medicaid if you’re approved for Social Security. To be eligible for Medicaid you must fall below income and asset limits.
– Be mindful of beneficiaries to life insurance policies and retirement plans.
– Leaving more than $2,000 of assets can disqualify a child from government benefits.