Trust Attorney Las Vegas | Special Needs Trust

Hello, this is Blake Johnson, and you’re listening to the Trust Attorney Las Vegas podcast. This is the podcast where we talk about all things that involve trusting others, especially attorneys, and is always welcome to the show today. We’re going to be disgusting and interesting and growing area of estate planning. And that is, uh, called special needs planning. Uh, specifically this special needs trust. Now, according to a study by the University of New Hampshire’s an institute of Disability, 12.8% of the US population has a disability of some kind. This is 2016 numbers. Uh, that’s up from 11.9% in 2010 so pretty high number. Um, and that number just continues to grow. So a lot of things to think about there. Now there’s two main categories of individuals with special needs and you have those who are born with the special needs and then you have some people who have it because of some sort of accident.

You’ve got in a car wreck, I had a stroke, you know, something like that, and that causes them to need constant care. Um, so yeah, those two types of things. Um, what I like to do is I like to classify it more as the type of planning that we need to do. And there’s two main categories there. There’s, um, self planning. So planning for your own care in case you have a special needs or your spouse has a special needs, um, or we have what’s called third party planning. So a child, your parents, um, you know, niece or nephew, a friend, however you want to, whoever you want to help out, um, but you’re planning for someone other than you or your spouse. So those are the two main categories we have with special needs Trust Attorney Las Vegas planning. Now let’s take the third party planning first. So this is once again, if you have, let’s say you have a child who is special needs autism, um, or you know, physically handicapped, whatever the case may be, um, and you want to make sure that they’re provided for, especially, you know, while they’re younger, uh, in case you die early.

So we do a special needs trust here. It’s a provision within your living trust. And what it does is we, we say within there that we’re going to use trust funds set aside for their benefit, but we don’t want to disqualify this child from getting federal or state assistance. And so what we do there is we put that language specifically in there, basically says that, um, you know, there’s no forced distributions that it’s completely up to the trustee’s discretion how the trust can be distributed. Um, but it’s to be used for the person’s benefit and you know, they are to pay as a, they’re not to pay the money to the, to the special needs child, but directly to the landlord for the rent directly to the hospital for any medical care that’s not covered by Medicaid or other insurance. Um, you pay directly for, to the school for the tuition or whatever the case may be.

Um, and then, you know, can we still be used to take the kid on vacation, but you pay the airline and then it never, it goes into the child’s bank account to disqualify them from that federal or state assistance. Um, so that way it is, does provide for them. Um, the other issue you have to worry about when you’re planning for a child with special needs is, um, as they get closer to turning 18, you know, they become an adult, you have to worry about guardianship because you want to be their legal guardian continuing. But after they turn 18, you have to get actual paperwork to show that. And that’s done through the guardianship court. So that’s an actual court hearing court procedure that you have to go through. Um, you want to get a guardianship attorney to help you with that and you want to probably started at least six months before the child turns 18, so that way, as soon as they turn 18, you can get that paperwork signed by the judge, get appointed as the Guardian and um, not have any issues or hangups for that interim period before it happens.

So those are a couple of key things that you need to worry about if you have a child, especially that has special needs. Um, but even, let’s say they’re grown and you already have the guardianship in place, you still want to do that special needs trust to make sure that the aid that they’re already getting, um, they’re not going to be disqualified for it because they receive a huge inheritance from you is that it doesn’t even have that big really, if they have anything more than $2,000 to their name, they’re going to be disqualified from Medicaid. So really important that you get that planning done ahead of time. And as I said, the other type of um, special needs planning and is called is for self planning now according to disabled in countries where life expectancy is at 70 years old or greater. So let’s say, you know, here in the U S is definitely us.

Our life expectancy is where to live past the age of 70 people on average in those countries at live, at least eight years with a disability of some kind. Then say that just, you know, a percentage, you know, on average every individual is going to have some sort of disability. Um, you know, this is really your greatest financial risk is to live with long, needing longterm care. So what happens? Well, if you, if you don’t have any money, that’s where Medicaid comes in. Now this is not Medicaid for the poor, for the indigent, you know, this is Medicaid. If you’re over 65, it’s actually part of the Social Security Act. So this is part of that social security insurance you’ve paid into this your whole life and so you should be able to collect on that benefit. Now the problem is is it’s like medic. It is Medicaid.

So you can only have $2,000 to your name. It’s basically like saying to an insurance company, Hey, um, you know, or the insurance come, you’ve paid into the insurance policy your whole life and the insurance company says, sure, we’ll help you out as soon as you spend all your own money. First kind of stinks. But that’s what the, what they’re saying. Um, now there is a way that, but before we get there, let’s talk about the other option for if for helping you with longterm care needs. If you have a disability and that’s if you’re a veteran, you know, if you’ve served our country honorably, first of all, thank you for doing so. Um, but there’s the thing, uh, in the VA called the aid and attendance benefit. Um, now you can apply for this benefit and if you qualify, you can get about $2,100 a month benefit to help pay for any longterm care.

Uh, now the problem with the veterans as they have a three year look back to see if you’ve done any transfers a little bit better than Medicaid. Medicare, Medicaid has a five year look back. Um, so, uh, we have to do some planning ahead of time. It was kind of the idea that I’m getting at. So if we set up this special needs trust, this one is different from the ones for the chil children because in the children’s one, it’s within your living trust. You can change it as you go along this special needs or sometimes referred to as a medicaid or VA or veterans’ trust. Um, you have to set up an irrevocable trust so we can’t change it once it’s set up. But the idea is you set it up, you transfer the assets out of your name into this trust and you’re no longer the trustee.

So you don’t have the signing ability. You have a child or a good friend do that and they manage the trust for your benefit. And we start that Trust Attorney Las Vegas clock. So we transfer the assets. Uh, if you’re a veteran, we only have to wait three years and then you can apply for that veterans benefit and start getting that money to help pay for your care. And then at five years you can apply for Medicaid and qualify for Medicaid benefits and idea of being the same that, you know, primarily we want those Medicaid or the Veterans Association to pay for your care. Um, but the trust monies there to pay for the extra stuff that you need. So, you know, so you can go on a trip so you can go see your family so your family can come visit you if you can’t leave. Um, you know, pay for, um, you know, spending money to go get, to go out to dinner, those kinds of things.

Cause you know, you can only have $2,000 to your name really to Ha to qualify for Medicaid. So this is a way around that. It’s actually, you know, it’s planning, it’s making sure that you get the benefit that you’ve paid into your whole life for or you know, especially if a veteran you risk your life for. And so we want to make sure that you can get those benefits that you deserve and not have to squander your whole wealth paying just for your care, but you can still leave a legacy to your kids. You can still go out and enjoy things. Um, so you know, really important that you talk to a qualified estate planning attorney who knows how to do this special needs planning for disability planning, whatever you want to call it. Um, so hopefully that gave you some, some things to think about. Uh, if you’re in one of those situations, you know, please reach out, happy to answer any questions you have about special needs, medicaid or VA trust planning. That’s all for now, and thank you for listening and we will talk to you next time.