Many families in the U.S. understand the term “special needs” because they have children or other family members who require assistance with some sort of disability. Providing for the long-term care of people with special needs presents many challenges, some of them legal. Attorney Katherine Barr practices extensively in the area of special needs. In this report, she explains what legal options are available to provide for the care of individuals with special needs and how a family can find a lawyer knowledgeable in this area of the law.
Barr explains that a special needs trust is one that is considered exempt in qualifying for means-tested government benefits. These include Medicaid and Supplemental Security Income (SSI). In order for a trust to qualify as exempt, , the trustee must have total discretion concerning distributions, with the beneficiary of the trust having no legal ability to compel the trustee to make payments for his benefit. The discretionary feature of a special needs trust takes the assets out of the reach of the Social Security Administration or a state Medicaid agency in determining eligibility for benefits.
Barr says that the Social Security Administration looks very carefully at a special needs trust to see how the trust is funded and whose money is in the trust, how it got there, and how trust assets are being disbursed. State Medicaid agencies have similar concerns. “So it’s a very particular trust.” There are several types of special needs trusts. One kind contains only the beneficiary’s money. Some trusts have assets that only came from some other source, such as life insurance payments from the beneficiary’s parents, or an asset of the estate of a parent, or a gift from a grandparent. Another variant is a pooled trust, which combines many relatively small sub-accounts into a big trust.
A critical issue in helping a child or relative with disabilities is finding the right lawyer to set up and handle the trust. Barr points out that clients will be looking for a lawyer who understands public benefits eligibility rules, and trust and estate planning law., If the trust will be receiving litigation proceeds as assets, the lawyer needs to understand structured settlements. The ideal lawyer will be one who also has good relationships with qualified corporate trustees. Barr says that qualified corporate trustees are not easy to find these days.
Once a decision is made as to the type of trust that will be used, there are several places one can look to find a lawyer. Barr suggests the Special Needs Alliance as the place to start. It is a non-profit, invitation only organization that lists qualified lawyers by state. Its members have demonstrated proficiency in special needs planning. Another possibility is the National Academy of Elder Law Attorneys, Inc. (NAELA). Barr says that a client needs to be careful and know what to look for. The Academy of Special Needs Planners may provide some help. There are also lawyer rating services such as Martindale-Hubbell and Super Lawyers that may be helpful. A simple Google search may provide you with some names of lawyers who are really not qualified.
Katherine Barr is a shareholder in Sirote & Permutt, PC in Birmingham, Alabama. She is a member of the firm's Estate, Wills & Trusts department. She handles all aspects of estate planning and administration for clients. The focus of much of her practice involves special needs planning, assisting clients in providing for a child or family member with special needs in a way that does not jeopardize government benefits. She is an Alabama Super Lawyer.
