Hyden, Miron & Foster, PLLC Law Blog

Monday, September 11, 2017

What You Need to Know About Special Needs Planning

If you have a child or other dependent with special needs, end of life planning is extremely important and cannot be left to chance. You want the best for your loved ones and want to ensure that they have the best possible resources to get them through the rest of their lives. In order to ensure that your loved ones are not missing out on important government benefits, you should work with an experienced special needs planning lawyer.

Special Needs Planning Basics

Special needs planning involves allocating resources for beneficiaries with special needs, that are dependent on one or more government programs for their health and welfare, in a manner that will not jeopardize those benefits. Government programs such as Medicaid and Social Security provide “means-based” benefits, any sudden or periodic infusion of money can disqualify your loved ones from these crucial benefits. For this reason, planning in advance for your loved-one’s care is essential.

Special Needs Trusts in Arkansas

Special needs trusts are irrevocable trusts that protect assets from creditors or lawsuits. What makes them special is that the assets must be distributed in a particular manner and only for a specific type of products and services.

There are two basic types of special needs trusts in Arkansas. These are:

  • General Support Trusts
  • Supplemental Care Trusts

General support trusts provide the primary or sole source of benefits for your loved one. Because the assets in this type of trust are considered “available assets” for purposes of the means-tests, these assets must be able to cover all of the disabled person’s needs. If they do not, it is possible that your disabled loved one may be unable to qualify for government benefits and be unable to pay for medical care and basic expenses on their own.

Most people opt for the supplemental care trust, which acts as a secondary source of funds for a disabled person. The assets in this type of trust are not considered “available” to the disabled person, so their benefits should not be at risk, if the trust is properly drafted. Assets in a supplemental care trust may be used for things like:

  • additional service providers
  • aides to assist with activities of daily living
  • transportation
  • home improvements
  • alternative living situations
  • education and training
  • hobbies
  • vacations
  • professional services
  • pet services

A creative attorney can draft a supplemental care trust in a way that just about any need can be provided for with the assets of this type of trust.

Funding a Special Needs Trust

A special needs trust may be funded via a will or during life through one or more inter vivos gifts. Additionally, third parties may fund the trust. If the trust is funded through the assets belonging to the disabled person, then the trust is considered “self-settled” and must be used to reimburse Medicaid upon the death of the disabled individual.

If you are concerned about providing for the needs of a disabled person in your life, talk with an experienced Arkansas special needs planning attorney at Hyden, Miron & Foster, PLLC today to set up your consultation.


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