1. Planning for a Loved One With Special Needs

2. © 2012 McDowall Cotter2 Robert D. Vale

3. © 2012 McDowall Cotter3 Brett S. Lytle

4. © 2012 McDowall Cotter4 Jaclyn B. Smith

5. © 2012 McDowall Cotter5

6. What Does Planning Involve? © 2012 McDowall Cotter6 Preserving your child’s financial security and quality of life Addressing key issues: Understanding the role of public benefits Making decisions about the future Using estate planning/trusts to protect assets

7. Part 1: Understanding Public Benefits © 2012 McDowall Cotter7

8. 8 Public Benefits at a Glance Financial Benefits Supplemental Security Income (SSI) Supplemental Security Income (SSI) Means Tested: Limited income and assets Means Tested: Limited income and assets Social Security (SS) Social Security (SS)& Social Security Disability Insurance (SSDI) Social Security Disability Insurance (SSDI) Not Means Tested :Not Means Tested : subject to work credits or parents’ eligibility 8

9. Public Benefits at a Glance © 2012 McDowall Cotter9 Medical Benefits Medi-Cal Automatic with SSI Automatic with SSI Must apply for SS/SSDI Must apply for SS/SSDIMedicare After two years of SSDI After two years of SSDI

10. © 2012 McDowall Cotter10 Supplemental Security Income (SSI) Must meet SSA’s definition of “disability” and have limited assets/income Provides monthly income for food/shelter Gateway to Medi-Cal / in-home support services

11. © 2012 McDowall Cotter11 Social Security (SS) / Social Security Disability Insurance (SSDI) Social Security for individuals: Disabled before age 22 and With parents eligible based on their work record who are retired, disabled or deceased SSDI for individuals with work record Social Security benefits may reduce or eliminate SSI benefits

12. © 2012 McDowall Cotter12 Medical Assistance & Support Medi-Cal: SSI recipients receive automatically Covers “medically necessary” services, equipment, hospitalization In-home services needed to live at home: personal care, housekeeping, cooking, transportation to doctors Medicare: Medical coverage, including doctors, hospital, skilled care

13. © 2012 McDowall Cotter13 SSI Medi-Cal SSDIMedicare How Benefits Work Together

14. © 2012 McDowall Cotter14 Part 2: Making Decisions About the Future

15. © 2012 McDowall Cotter15 Case Study: Nathan Current situation: 18-year-old with autism Lives with mom Income from work programs, SSI, Social Security (from dad who is deceased) Limited personal assets (clothing, tv) Qualifies for Medi-Cal

16. © 2012 McDowall Cotter16 Case Study: Nathan Future situation: Who will make health care decisions? Who will make financial decisions? Where will he live? How will his medical expenses be paid?

17. © 2012 McDowall Cotter17 What Plan Could Nathan’s Mom Make? Possible Options: Make no decisions/plans Leave money to Nathan Disinherit Nathan Leave money to a future caregiver Establish third-party SNT for Nathan Establish first-party SNT for Nathan

18. © 2012 McDowall Cotter18 Part 3: Creating an Effective Plan for Your Child

19. © 2012 McDowall Cotter19 What Steps Should You Take Today? Step 1: Envision Your Child’s Future Planning ahead makes a difference: Where and with whom will your child live? What type/level of care will be required? Will a guardian/conservator be necessary? Who else will be involved? What kind of lifestyle is desired? What unforeseen challenges could arise?

20. © 2012 McDowall Cotter20 Lays out goals/expectations: Details preferences, needs, wishes, both medical and personal Lists key people in child’s life Helps guide: Family members Trustees Caregivers Others What Steps Should You Take Today? Step 2: Create a Memorandum of Intent

21. © 2012 McDowall Cotter21 Monthly income: SSI, SSDI, Social Security, earned/unearned income Monthly living expenses: Housing, food, transportation, medical, recreation, etc. Consider how any shortfall will be met What Steps Should You Take Today? Step 3: Estimate Income & Expenses

22. © 2012 McDowall Cotter22 Provides supplemental funds for living expenses not covered by other income sources May be established by parents: Through will Through living trust “Living” SNT lets others contribute Trustee has discretion over distributions What Steps Should You Take Today? Step 4: Utilize a Third-Party SNT

23. © 2012 McDowall Cotter23 The SNT Trustee Responsibilities What are the trustee’s responsibilities? Invests/manages assets Distributes funds Keeps books Files tax returns Hires advocates and care managers, etc., as needed

24. © 2012 McDowall Cotter24 Selecting an SNT Trustee Who should be the trustee? Parent with professional co-trustee Corporate or other professional trustee Successor trustee

25. © 2012 McDowall Cotter25 What Parents Should Do Create Memorandum of Intent Calculate future financial need Establish SNT through will or living trust Fund SNT with life insurance Name SNT as beneficiary of accounts, plans, etc. Reduce taxable estate

26. © 2012 McDowall Cotter26 What Your Child Should Do Sign Advance Directives, if legal capacity Have a legal guardian appointed: When child without mental capacity becomes an adult and parents want to maintain legal responsibility Court appoints legal guardian

27. © 2012 McDowall Cotter27 What If Your Child Has Assets? Establish a First-Party SNT: Provides funds for living expenses not covered by other income sources Maintains eligibility for public benefits Must be established by parent, grandparent, legal guardian or the court State must be reimbursed from the trust for all Medi-Cal expenses

28. © 2012 McDowall Cotter28 Get Started Today Understand your child’s eligibility for public benefits. Make plans for the future to maximize public and private resources for your child’s benefit. Make the SNT a key part of your estate plan. Contact a special needs attorney for the assistance you need.

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