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Estate Planning, Probate, Guardianship & Elder Law

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Mary Beth Kelly

Sensitive Guidance Through Special Needs Planning

When you have a sibling, parent or child with special needs, there are many things that can add stress to your life. Planning for their future does not have to be on the list. We can simplify the process to ensure they are well taken care of. Special needs planning is estate and financial planning for the beneficiary as well as ensuring they have the entitlement to needs-based public assistance programs if they qualify for any.

There can be many challenges of special needs planning, but there are ways to make the planning easier. Everyone should have a plan in place. There are longer life expectancies as well as greater expectations about the quality of life. Unfortunately, there are many people who do not have the proper documentation in place, which leaves a lot of burden or even resentment among their siblings for future personal and/or financial responsibilities. Many times there are not enough family resources to pay for everything, and the public benefits they currently qualify for may be inadequate or even disappear with time. These are just some of the very important reasons to plan for their future so they are taken care of the way you would want them cared for.

There are many things to consider when planning for your future. Some of those things we can help you plan for are:

  • Guardianship (person/property/plenary/limited)
  • Guardian advocate
  • Durable power of attorney/health care surrogate
  • Disinherit/provide for third parties
  • Joint ownership
  • Trusts

Your Child Is 0-18 Years Of Age

When your child is still a minor, the parents are still in complete control of the care, support and legal authority. The child is usually not eligible for public assistance because of the low income/asset thresholds and parents’ resources countable and available to the special needs child.

Your Child Is Over 18

According to the Law, your child is now an “Adult.” The parents are no longer in control. The authority to make legal decisions on behalf of the child is gone unless preparations have been made (see below). If the parents’ resources end, the child now may be eligible for public assistance, depending on the program and the standards.

Frequently Asked Questions In Florida About Special Needs Planning

Planning for a loved one with special needs involves many considerations. Below are answers to some of the most common questions about special needs trusts and planning.

Can a special needs trust be modified or revoked?

A special needs trust is generally irrevocable, meaning it cannot be revoked or changed once established.

However, certain modifications may be possible under Florida law, such as changing the trustee, adjusting distributions or restructuring the trust to comply with legal requirements. A court order or trust provisions allowing modifications may be necessary.

How does eligibility for government benefits factor into special needs planning?

Special needs planning protects an individual’s eligibility for essential government benefits such as Supplemental Security Income (SSI) and Medicaid.

A properly structured special needs trust allows funds to be used for expenses beyond basic needs without jeopardizing benefits. Mishandling assets, such as giving money directly to the beneficiary, can result in disqualification from these programs.

Are there any tax implications to creating a special needs trust?

Yes, a special needs trust may have tax consequences depending on how it is structured. For example, a third-party trust funded by family members is taxed as a separate entity. On the other hand, a first-party trust, funded with the beneficiary’s assets, may be subject to Medicaid payback rules.

Additionally, when a third party (such as a parent or grandparent) funds a special needs trust, it may be considered a taxable gift. However, contributions may qualify for the annual federal gift tax exclusion ($18,000 per donor in 2024) if properly structured.

How do I choose the right trustee for my special needs trust?

Selecting a trustee is a critical decision. The trustee should be trustworthy, financially responsible and familiar with the beneficiary’s needs.

Many families choose a combination of a professional trustee (such as a bank or trust company) and a family member to balance financial expertise with personal understanding.

Planning Devices

Call The Law Office of Mary Beth Kelly, LLC, in Lake Mary at 407-536-6901 or send an email to discuss a special needs trust today.