Category: Disability Issues Blog

I am a Special Needs Trust Attorney and I am here to help. I am the founder of a nonprofit 501(c)(3) corporation that provides quality information about resources available to families as well as providing affordable Special Needs Trusts and estate planning for families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

April 24, 2022February 14, 2024

The 7 most important reasons to have a will

More than half of Americans don’t have a will. This is a list of seven of the reasons to create one.

Having a will is a must! Not having a will could lead to problems when you’re gone. Your loved ones may be left wondering about what to do with your belongings or money. People who don’t have a will often end up getting into disputes over inheritance. A will ensures that your wishes are followed after you pass away.

The Reasons To Have A Will

1. Save time, money, and stress for your loved ones.

Almost all states have a legal process called probate court that oversees the distribution of assets. However, if you don’t own a will, the court system — which is called intestate administration — can become especially complicated. If there is no will, the court has no choice but to appoint someone to administer your estate. And this can be difficult, expensive, and even controversial for your family members.

One of the top reasons to have a will is to streamline this court process. When you have a will, you can choose the person you want to handle your estate, making it easier for your loved ones.

2. Determine who will manage your estate.

As mentioned above, deciding who will handle your estate is a great reason to have a will. When you write a will, you become a “testator” and have the opportunity to nominate an “executor” or in many states is referred to as a “personal representative.” This is the person who will be in charge of wrapping up all your affairs.

Being an executor is an important job. They may be responsible for everything from closing bank accounts and liquidating assets to managing cash flow. You should choose someone who is competent and who you trust to perform these tasks. If you don’t choose an executor in advance, the court will appoint one for you, and it might not be the person you’d want.

3. Decide who gets your assets and property — and who does not.

A will lets you decide who gets your property after you die. You can name people as beneficiaries of specific assets. You can also name beneficiaries for any property that you didn’t list – the “residuary” of your estate. Your executor will handle your estate after you die. They’ll distribute your assets among your beneficiaries.

You might not know that you can also use your will to help ensure that certain people don’t receive anything.

4. Choose who will take care of your minor children.

You can use your will to name guardians for your minor children.## Inputs If one parent dies, the surviving parent will usually get full legal custody. But if both parents die, this is one of several reasons why having a will is so important.

A guardian will be in charge of all your children’s daily needs, including food and shelter. If you don’t nominate a guardian in your Will, a Court will have to choose one. This might mean that someone you wouldn’t have chosen will raise your children.

5. Lower the potential for family disputes.

If you have complicated familial dynamics, there’re good reasons to have a will. If you don’t have a will, your family members will have to guess at your final wishes. And chances are, they won’t always agree. This ambiguity can create conflict, and even fights, that last for a lifetime. Creating a will eliminates the need for guessing.

6. If you have a child with special needs you can provide them with a comfortable future.

If you have a child with special needs it is especially important that you provide for them in a way that will leave them your assets and still allow them to collect government benefits. You can do this by leaving your assets to a trust for the child and not directly to the child themselves.

7. It’s easy to make a will and gain peace of mind.

Some people don’t create or update their wills because they assume their loved ones will automatically inherit everything. But this isn’t always true. Probate can be an expensive and lengthy process for your heirs. And, a will only addresses your current circumstances. You should update it over time as your needs and the people in your life change.

You can leave instructions for your loved ones and provide them with a clear path to follow after you die. It gives many people peace of mind, making it one of the top reasons for having a will.

It’s easier than it has ever been to make a will. Unless you have a very large estate, complex family dynamics, or feel that you need expert legal advice, you don’t need a lawyer to draft your will. With SpecialNeedsTrustsOnline.com, you can create your own will for free, using our simple, online self-help tools.

April 22, 2022November 16, 2025

How A Special Needs Trust Works

What Is a Special Needs Trust?

A special needs trust is a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to receive income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare or Medicaid. In a fiduciary relationship, a person or entity acts on behalf of another person or people to manage assets.

A special needs trust is a popular strategy for those who want to help someone in need without taking the risk that the person will lose their eligibility for programs that require their income or assets to remain below a certain limit.

Source: investopedia.com

Key Takeaways

A special needs trust is a legal arrangement that lets a physically or mentally ill person, or someone chronically disabled, have access to funding without potentially losing the benefits provided by public assistance programs.

This trust allows for the additional financial support of an individual with special needs, without risking bumping them out of contention for disability benefits.

Public assistance programs set up for people with special needs are predicated on certain income and asset restrictions; money put in the trust doesn’t count toward the purpose of qualifying for public assistance.

Source: investopedia.com

How a Special Needs Trust Works

A special needs trust covers the percentage of a person’s financial needs that are not covered by public assistance payments. The assets held in the trust do not count for the purposes of qualifying for public assistance, as long as they are not used for certain food or shelter expenditures. Proceeds from this type of trust are commonly used for medical expenses, payments for caretakers, transportation costs, and other permitted expenses.

The party who creates the trust will designate a trustee who will have control over the trust. This trustee will also oversee its management and the disbursement of funds. Assets originally belonging to the disabled individual that get placed into the trust may be subject to Medicaid’s repayment rules, but assets provided by third parties such as parents are not. This type of trust is sometimes also called a “supplemental needs trust.”

Special needs trusts are irrevocable—neither creditors nor the winner of a lawsuit can access funds designated for the beneficiary.

Source: investopedia.com

Benefits of a Special Needs Trust

Establishing a special needs trust can have benefits for both parties. The beneficiary has a way to receive financial support without putting their eligibility for income-restricted programs or services in jeopardy. Meanwhile, the person or party that creates the trust has some reassurance that the proceeds will go to expenses they stipulate.

When a third party puts money in a special needs trust, the party is assured that the money will be used for its intended purpose. For example, parents might put assets in a special needs trust to provide for their disabled daughter instead of giving that money to their son. Special needs trusts are irrevocable, and their assets cannot be seized by creditors or by the winner of a lawsuit.

It is important that the person who creates the trust or their legal representative word the terms of the trust documents very carefully to ensure its validity, and to confirm that the directives and purpose of the document are explicitly clear. The special needs trust must be established before the beneficiary turns 65.

Source: investopedia.com

Providing For A Family Member with a Disability

The primary purpose of a special needs trust is to provide for the needs of an individual without disrupting that person’s eligibility for Medicaid and Social Security and other government benefits. The experienced supplemental benefits trust attorney SpecialNeedsTrustsOnline.com, can structure the trust to make sure your loved one has the provisions necessary to maintain his or her quality of life without losing government benefits.

We provide comprehensive estate planning services to families throughout Massachusetts and across the United States.

Arrange for a free consultation today about creating a special needs trust.

Tell Us About Your Concern

Call Now: (508) 690-0012

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Services Provided

Special Needs Trusts Online Can Help!

I am a Special Needs Trust Attorney and I am here to help. I am the founder of a nonprofit 501(c)(3) corporation that provides quality affordable Special Needs Trusts to families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

The Main Bullet Points Of How A Special Needs Trust Works

Establishment: A Special Needs Trust (SNT) is created to manage assets for the benefit of an individual with a disability, known as the beneficiary.
Funding: Assets, such as cash, investments, or real estate, are transferred into the trust by the grantor, typically a parent, guardian, or relative of the beneficiary.
Trustee: A trustee is appointed to manage the trust assets and make distributions according to the terms outlined in the trust document. This could be a family member, friend, attorney, or professional trustee.
Government Benefits Preservation: One of the primary functions of an SNT is to preserve the beneficiary’s eligibility for means-tested government benefits, such as Supplemental Security Income (SSI) and Medicaid, by keeping assets in the trust rather than in the beneficiary’s name.
Supplemental Support: The trust can provide supplemental support to enhance the beneficiary’s quality of life, covering expenses not met by government benefits, such as medical treatments, therapy, education, housing, transportation, and recreational activities.
Discretionary Distributions: Distributions from the trust are made at the discretion of the trustee, based on the beneficiary’s needs and best interests, rather than as direct payments to the beneficiary.
Trust Administration: The trustee manages the trust assets, invests them prudently, keeps accurate records, files tax returns, and ensures compliance with legal requirements.
Termination: The trust may terminate upon the beneficiary’s death or upon exhausting its assets, at which point any remaining funds may be distributed according to the terms of the trust document, such as to other family members or charitable organizations.

April 21, 2022February 14, 2024

Power of Attorney for Education

Power of Attorney for Educational Purposes

Through an educational power of attorney, a student can authorize an agent to make educational decisions. That leaves the student free to focus on learning. The student’s designated agent can apply for financial aid, register for courses, and review ed

Why the EPOA Is Useful

Once a student turns 18, she’s legally an adult, empowered to control her own life. If she has disabilities, however, she may not be ready to make all the necessary adult decisions. It’s not a matter of intelligence – a student who’s a whiz in class may still not be able to talk with faculty advisers, decide a schedule or navigate the maze of financial aid.

In general, a power of attorney authorizes an agent to make decisions for the person who signs the document. It allows the agent to do just about anything the person could do for himself. Limited POAs assign the agent specific tasks, such as selling a house, or a specialized area of authority, such as making medical decisions. An Educational Power of Attorney, or EPOA, grants the agent authority to act only in the educational world.

The Power of an EPOA

The educational power of attorney allows the agent to handle any decisions the student doesn’t think she can cope with. It can be broad, covering all the bureaucratic tasks and paperwork involved in attending college, or specialized to deal with specific areas. The agent can make decisions exactly as if she were the student herself. These include:

registering for class.
deciding on a course of study.
meeting with the administration.
requesting any special assistance the student needs.
applying for financial aid.
The agent cannot, however, attend classes or take tests for the student.

As an adult, the student has the legal right to decide to create a EPOA. If he doesn’t think it’s in his best interest to appoint an agent, it can’t be forced on him. The EPOA is supposed to meet his needs, but not what other people think he needs.

Creating an EPOA

You can create your power of attorney for educational matters now, or find out more information by clicking here!

Special Needs Trusts Online Can Help!

I am a Special Needs Attorney and I am here to help. I am the founder of a nonprofit corporation to that provides quality affordable Special Needs Trusts to families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

April 20, 2022February 14, 2024

Financial Planning

GMB Episode #125: Estate Planning For Families With Special Needs Children With Tom Sannicandro

Show Notes

[02:54] Tom’s Journey – Tom shares why he switched his legal practice from corporate law to disability law.

[11:48] Asset Protection – Tom shares his perspective on asset protection related to individuals with disabilities.

[18:16] Finding a Trustee – Appointing a trustee for a special needs trust entails a great deal of confidence. Tom stresses the importance of selecting a suitable person to manage the trust.

[21:40] Special Needs Trust – Tom shares how he assists his clients, and what the process for setting up a special needs trust through his website looks like.

[36:08] ABLE Account – Tom discusses the functionality of a ABLE account.

[11:25] Letter of Intent – Tom and Grant discuss the purpose of a Letter of Intent.

[14:09] Medical Support vs. Financial Support – Tom shares his perspective on having an individual assisting with medical decisions simultaneously serving as the trustee.

[16:57] Future Work – Tom shares his future goals, and how he intends to continue serving his clients.

Resources

April 20, 2022February 14, 2024

Special Needs Government Benefits

Government Benefits for Individuals with Special Needs

While it is critical to ensure that you have adequate planning in place to preserve your child’s eligibility for government assistance, it is important for individuals to know what government benefits are available to a child with special needs and when these benefits are available. Because government programs can be confusing and since they change often, anyone seeking to learn more about receiving government benefits for a child with special needs should contact me with any questions.

There are four relevant government benefit programs available to special needs families. These are Supplemental Security Income (“SSI”), Medicaid, Medicare and Social Security Disability Insurance (“SSDI”). Both SSDI and Medicare are not means based programs. In other words, there is no investigation into your finances to determine if you qualify for the program based on your income or your resources. Medicare is a form of sponsored health insurance available for the elderly and the disabled and SSDI is available to individuals and minors or special needs children of an individual who has died, retired or become disabled. A special needs child who is under age 22 and who is not working can obtain SSDI benefits based on his or her parents’ prior earnings.

SSI and Medicaid are both means based programs. Eligibility for those programs is based on financial need and strict requirements must be met prior to receiving benefits. Medicaid can provide in-home care, cost of hospitalization and nursing home care as well as some housing benefits to recipients. A special needs child can receive SSI, SSDI, Medicaid and Medicare all at the same time.

The distinction between means and non-means based programs is important to understand. Since these benefits add greatly to a disabled person’s ability to receive care, and given the expensive cost of long-term medical and nursing care, anyone seeking to give a special needs child assets may disqualify him or her from receiving means-based program benefits. However, setting up a supplemental needs trust for your special needs individual can help provide for their care without disqualifying him or her from SSI or Medicaid benefits.

Although the requirements should be reviewed periodically for changes, currently, to qualify for SSI benefits, a disabled adult cannot own more than $2,000 of assets. There is a link between eligibility for Medicaid and eligibility for SSI. Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services. Given the very low poverty threshold, setting up a supplemental needs trust can help provide for extra care over and above that which the government may provide.

In addition to applying for the benefits above, special needs individuals with developmental disabilities should get in touch with the state agency that provides services for adults with disabilities. Find your state agency by clicking here. These agencies provide a wide array of benefits including day services such as support for people who are employed, residential services such as individual support that assists an individual living at home or elsewhere in the community, and family support services that assist families caring for loved ones at home.

Parents of children with special needs should make sure their child will be protected after they have passed away as they have protected the child during their lifetimes. Given the cost of long-term care for a child with special needs, you should consider whether government benefits can be helpful in meeting some of those needs. A typical plan for an individual may include drafting a will and creating a special needs trust. Also important are designations of trustees, a conservator in the event of future incapacity or a standby guardian for a developmentally disabled family member. In addition durable powers of attorney, living will and related documents should be in place. Finally, securing government benefits for a special needs child can enable that person to have the resources necessary for quality long-term care.

I am a Special Needs Trust Attorney and I am here to help. I am the founder of a nonprofit corporation to that provides quality information about resources available to families as well as providing affordable Special Needs Trusts and estate planning for families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

Able Account vs Special Needs Trusts

Understanding an Able Account vs Special Needs Trusts

ABLE accounts and special needs trusts (SNTs), also known as supplemental needs trusts, both give people with disabilities a way to save money tax-free. By saving money in an ABLE account or supplemental needs trust, you can also make sure that a disabled person continues to be eligible for public programs.

Both ABLE accounts and supplemental needs trusts protect resources. Each allows the accumulation of resources for the benefit of an individual with a disability without jeopardizing key federally funded benefits like Supplemental Security Income and Medicaid.

There are significant differences between the two ways of saving, though. ABLE accounts and SNTs have different rules when it comes to what you can use your savings for. They also have different annual limits on how much you can save. Then there are a number of other differences that may have an impact on you, depending on your circumstances.

In this article, we’ll take a brief look at each type of saving strategy, and then explore the differences between them.

Source: investopedia.com

Key Takeaways

Both ABLE accounts and supplemental needs trusts allow a person diagnosed with disabilities—or their relatives—to save money without affecting their eligibility for public benefits. Prior to 2014, only supplemental needs trusts could be used for this purpose.

ABLE accounts are easier to set up and manage. However, they come with some disadvantages—primarily, limits on the amount of money you can contribute each year.

Supplemental needs trusts don’t have any such limits, but can be expensive to set up and more complicated to manage.

You don’t have to choose one or the other. It’s possible to set up an ABLE account for everyday expenses, and have a supplemental needs trust that you can use for larger purchases that are not covered by public benefits.

Source: investopedia.com

Supplemental Needs Trusts

A supplemental needs trust is a way for a disabled person to receive money without losing access to their public benefits.

Most public assistance programs for people with disabilities have income and asset restrictions—if a disabled person earns too much, or has too much money in savings, they will no longer be eligible for these benefits. A supplemental needs trust is a way around this restriction. Money put in the trust doesn’t count toward the purpose of qualifying for public assistance.

A supplemental needs trust is a legal arrangement and fiduciary relationship. In a fiduciary relationship, a person or entity acts on behalf of another person or people to manage assets. A supplemental needs trust is a popular strategy for those who want to help someone in need without taking the risk that the person will lose their eligibility for programs that require their income or assets to remain below a certain limit.

Establishing a supplemental needs trust can have benefits for both parties. The beneficiary has a way to receive financial support without putting their eligibility for income-restricted programs or services in jeopardy. Meanwhile, the person or party that creates the trust has some reassurance that the proceeds will go to expenses they stipulate. Supplemental needs trusts are irrevocable, and their assets cannot be seized by creditors or by the winner of a lawsuit.

It’s also important to recognize that the money in a supplemental needs trust can only be used for a limited range of expenses. You are not supposed to use these funds to cover basic living expenses. Instead, proceeds from this type of trust are commonly used for medical expenses, payments for caretakers, transportation costs, and other permitted expenses.

Source: investopedia.com

ABLE Accounts

In many ways, an ABLE account is similar to a supplemental needs trust. An ABLE account is a tax-advantaged savings account available to individuals with significant disabilities appearing before age 26. Contributions can be made to the account by the beneficiary, friends, or family members, just as with a supplemental needs trust.

Just as with a supplemental needs trust, money saved in an ABLE account doesn’t affect a disabled person’s eligibility for public benefits. There are also tax benefits to setting up an ABLE account—while the contributions themselves are not intended to be tax-deductible, the funds within the account grow tax-free and distributions are tax-free.3

ABLE accounts are a much newer financial product than supplemental needs trusts. They were created by the 2014 Achieving a Better Life Experience (ABLE) Act as a way of giving more disabled people access to the benefits that, up until then, were restricted to those who held supplemental needs trusts.2

ABLE accounts can be used to pay for a wider range of things than the money in a supplemental needs trust. The money in an ABLE account can be used to pay for any qualified disability expenses (QDE).

Source: investopedia.com

Important

There is an annual limit to how much you can contribute to an ABLE account: $16,000 in 2022. Supplemental needs trusts have no limits.

Source: investopedia.com

Key Differences

There are three main differences between supplemental needs trusts and ABLE accounts: eligibility, the expenses permitted for each type of account, and the limits on how much money you can save through them.

Source: investopedia.com

Eligibility

ABLE accounts are available only for people with onset of a disability prior to age 26, as determined by Social Security’s criteria regarding significant functional limitations stemming from the disabling condition in order to be eligible for an ABLE account.

First-party supplemental needs trusts, which are funded with assets belonging to the beneficiary, must be established before an individual meeting Social Security’s disability criteria reaches the age of 65. There are no age limits for creating third-party trusts, funded with assets belonging to anyone other than the beneficiary.

Source: investopedia.com

Account Limits

ABLE accounts have contribution as well as amount limits. You can only contribute a certain amount each year. This amount is set federally under the same tax code governing 529 plans: $16,000 in 2022. In addition, ABLE accounts have a maximum limit set by the state that manages them. Many states set this limit above $300,000, with only the first $100,000 exempt from impacting eligibility for supplemental security income (SSI). Supplemental needs trusts have no such limits.

One disadvantage of supplemental needs trusts is that they can be expensive to set up. You will typically need to hire an attorney to set up the trust, SpecialNeedsTrusts Online, a non-profit corporation that provides families with an affordable option can provide this at a fraction of the cost. In contrast, setting up an ABLE account is fast and easy, and can be done directly through the state’s website. No attorney or financial advisor assistance is needed.

Source: investopedia.com

I am a Special Needs Trust Attorney and I am here to help. I am the founder of a nonprofit corporation to that provides quality information about Able Accounts and affordable Special Needs Trusts to families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

What Is An Able Account

Have You Ever Wondered What Is An Able Account?

About ABLE Accounts

Living with a disability is often associated with significant amounts of extra costs. That’s why individuals and families can now contribute to ABLE accounts — tax-advantaged savings accounts that can fund disability expenses.

Source: ablenrc.org

10 Things You Should Know…

What is an ABLE account?

ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families, were created as a result of the passage of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 or better known as the ABLE Act. The beneficiary of the account is the account owner, and income earned by the accounts will not be taxed. Contributions to the account, which can be made by any person (the account beneficiary, family, friends Special Needs Trust or Pooled Trust), must be made using post-taxed dollars and will not be tax deductible for purposes of federal taxes; however, some states may allow for state income tax deductions for contributions made to an ABLE account.

Source: ablenrc.org

Why the need for ABLE accounts?

Millions of individuals with disabilities and their families depend on a wide variety of public benefits for income, health care and food and housing assistance. Eligibility for these public benefits (SSI, SNAP, Medicaid) require meeting a means/resource test that restricts eligibility to individuals with less than $2,000 in liquid resources, such as cash savings, non-ABLE checking and savings accounts and some retirement funds. To remain eligible for these public benefits, an individual must remain poor. For the first time in public policy, the ABLE Act recognizes the extra and significant costs of living with a disability. These include costs related to raising a child with significant disabilities or a working-age adult with disabilities, accessible housing and transportation, personal assistance services, assistive technology and health care not covered by insurance, Medicaid or Medicare. For the first time, eligible individuals and their families will be allowed to establish ABLE savings accounts that will largely not affect their eligibility for SSI, Medicaid and means-tested programs such as FAFSA, HUD and SNAP/food stamp benefits.

The legislation explains further that an ABLE account will, with private savings, “secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other sources.”

Source: ablenrc.org

Which expenses are allowed by ABLE accounts?

A “qualified disability expense” means any expense related to the designated beneficiary as a result of living a life with disabilities. These may include education, food, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses which help improve health, independence, and/or quality of life.

Source: ablenrc.org

For more information https://www.ablenrc.org/what-is-able/what-are-able-acounts/

I am a Special Needs Trust Attorney and I am here to help. I am the founder of a nonprofit corporation to that provides quality affordable Special Needs Trusts to families. I have over 20 years of experience helping families just like yours. Find out more information at SpecialNeedsTrustsOnline.com or click here to set up a free appointment.

Letter of Intent Special Needs

What Is Letter Of Intent Special Needs?

The Special Needs Letter of Intent

An important companion piece to a special needs trust is a “letter of intent” or “letter of instruction.” Learn more and get your free Letter of Intent.

Letters of Intent

When you have a child with a disability or special health care needs, having a Letter of Intent about your and your child’s vision for their future can be an important part of your estate plan. By answering the question of what will happen to them if you are not able to take care of them is very important.

You can get powers of attorney, designate a guardian if needed, and take care of money and property through a will or special needs trust . But, what about your child’s everyday care? What about their school needs? What about the medications and medical procedures they need?

You know so much about your child’s unique needs, likes, and dislikes that you sometimes take care of them without even thinking. Imagine if everyone else who took care of them knew these things just as easily.

That’s the purpose of a Letter of Intent, often called an LOI.

An LOI is a document that serves as a life plan for your child. It helps to properly direct their overall care, if you aren’t around to oversee things. Even though you don’t use a lawyer to write this letter, and it doesn’t need to be notarized, the court might use it to direct a future caregiver. And a medical team might use it to make their decisions. When you combine an LOI with your other legal documents, as well as a will and a special needs trust, you have a set of tools to make sure your child is taken care of even if you aren’t around or able to.

What Goes Into a Letter of Intent?

The LOI should describe everything involved in taking care of your child. It might cover these areas:

Financial and legal issues.
Medical issues, health, and wellness.
Relationships.
Housing.
Personal care.
Work.
Fun or relaxing activities your child likes.
Spirituality and faith.
Routines and special considerations.
Hopes and dreams for the future.
Communication systems.
Behavior supports and recommended responses to challenging behaviors.

How Do I Write an LOI?

Creating an LOI might seem like a lot of work at first.

But, the good news is that you don’t have to put it together in a single sitting. An LOI should be a living document that changes as your child’s development, desires, needs, abilities, and caregivers change. That means you can take your time to create each part of the plan and update it when needed.

Tips for Writing an LOI

Start with a template. The Special Needs Trusts Online has a good one.

Involve your child in the process as much as they are able. Have them help you answer the questions about their dreams and desires, likes, and dislikes.

Don’t try to do it all in 1 chunk. Take small bites out of the entire plan by filling in a section at a time. Maybe even set a certain day of each month to work on it.

Involve friends and loved ones in the process. They might have good suggestions or can just help to keep you on track with your writing.

What to Do Once You Have Your LOI

Once you’ve written the LOI, take a deep breath and congratulate yourself! Here are some tips to get the most use out of it:

Store an up-to-date LOI copy with your will and make sure your loved ones know where to find it.

Use it as a tool for advocacy. Because it clearly lists preferences and needs, it can help you or your child advocate with their doctor, school, or health insurance company. Even if these people have not seen an LOI before, pointing out how it includes a clear list of your child’s needs can help your discussion.

Pick a date each year to review and update the LOI.

Creative Uses for Your LOI

Share it with teachers or summer camp directors just in case a medical need comes up, and so they can better know your child’s needs.

Use the wants and needs section to direct your school-planning meetings.

Use it to train any new caregivers.

Read it over whenever you’re making a big plan or decision for your child.

Use your LOI updates to track your child’s accomplishments and growth. Maybe they have new dreams, more independence, or different skills than in the past.

Keep a copy in your care notebook to bring to doctor’s visits.

For More Information Special Needs Trusts Online Can Help!

What can a Special Needs Trust pay for?

Overview of what a special needs trust can pay for

Sometimes it is difficult to figure out what expenditures are appropriate from a Special Needs Trust. Confusion may arise because of differences in state law, trust size, age or condition of the beneficiary, terms of the trust itself, or any number of other variables. To compound the problem, there has been little direct guidance from the courts, and the legal literature is far from extensive.

The Range of Choices.

A Special Needs Trust might have been created to handle proceeds from a personal injury settlement or an inheritance left directly to an individual with a disability. It might be designed to protect eligibility for Supplemental Security Income (SSI), Medicaid or other public benefits programs — or for a number of programs (usually including those two) at the same time. Common questions about use of trust money revolve often revolve around travel and entertainment, transportation and housing — but all manner of other expenditures crop up as an issue from time to time.

In one case, a mother acting as trustee might wonder about her ability to pay another family member for personal care not covered by Medicaid. In the next, a corporate trustee might be willing to pay for a trip to Disney World, but not know how to cover the costs or whether to pay for other family members who travel with the trust beneficiary. In yet another, the father who established the trust might chafe at the suggestion that he should not use money he contributed to the trust to pay for improvements on the family home.

Where to Look for Answers.

The first advice to a trustee is usually to look at the trust document itself. It may be fine that state and federal law permit a particular expenditure, but if the trust does not then the trustee cannot take advantage of the government’s flexibility. Sometimes there is nothing to prohibit a proposed expenditure in public benefits law or the trust document, but that still might not mean that the purchase is appropriate — it might be imprudent considering the circumstances, or a violation of general trust administration principles.

All that said, the very purpose of Special Needs Trusts is usually to provide extra, or supplemental, items to the beneficiary — the things that the system, family and other sources cannot or will not provide. One of the very few court cases addressing this concept is a 2004 Minnesota Court of Appeals case, In re: The Irrevocable Supplemental Needs Trust of Collins.

Mr. Collins had been appointed trustee of a Special Needs Trust for the benefit of his teenage daughter. Over the course of five years, he used trust income and assets to pay for a number of items that later were challenged in court. A local judge ordered Mr. Collins to repay a little more than $2,000 of allegedly improper expenditures.

What had Mr. Collins paid for with trust funds that got him in trouble? Among other things, he had purchased a snowmobile for her when she was 13, and Britney Spears concert tickets for her a year later. The Judge reviewing his accounting decided that some of those expenditures were inappropriate for a young beneficiary, and that was why Mr. Collins was ordered to return the funds from his own money.

The Court of Appeals Reviews the Accounting.

Mr. Collins appealed the order directing him to return funds, and the state Court of Appeals (one step below the state Supreme Court in Minnesota) agreed with him. The proper approach, ruled the appellate court, was not to second-guess the trustee as to each expenditure, but to determine whether the trustee was properly exercising his discretion. Since the whole point of a Special Needs Trust (or, as the trust was called in this case, a “Supplemental Needs” Trust) is to provide for extra benefits that are not otherwise available, the trial judge here should have presumed that a trustee/father knows best whether his daughter is mature enough to ride a snowmobile or attend a Britney Spears concert.

The Minnesota case gives some insight into how judges — at least appellate judges — view Special Needs Trust expenditures, but it does not provide much assistance. That is partly because the decision was “unreported.” That means that the judges decided that it should not be made available to cite as precedent. Even if it had been reported, it might not be very useful outside of Minnesota.

Nonetheless, the Collins case can give us some assistance in determining whether a given expenditure should be approved from a Special Needs Trust. Among the items to consider in a given case:

1. Is the expenditure permitted by the trust terms? Is it prohibited by Medicaid or Social Security regulations?

2. Does the expenditure clearly benefit the trust’s beneficiary? Does it also benefit others, such as family members? If it benefits the trustee (as, for instance, a home improvement that clearly aids the beneficiary but also increases the value of the home owned by a parent/trustee), it should be scrutinized much more closely, and may not be permissible in all circumstances.

3. Is there enough money in the trust to make the proposed payment without seriously affecting the ability to provide other benefits in coming years? Not every expenditure that reduces future benefits is forbidden, but the larger the expenditure (in relation to the trust’s size), the harder it is to justify.

4. Is the proposed expenditure related to the purpose for which the trust was established? In other words, if the trust came from a personal injury settlement it will ordinarily be easier to approve expenditures for therapy or adaptive equipment related to the injury for which the settlement was obtained.

5. Are there other sources of funds? If public benefits are available to provide the same items, the money ordinarily should not come from the trust. But if the public benefits are so limited that the quality of the items will suffer, or if it takes an extremely long time for equipment or services to get to the beneficiary, the trust might still be available to make the purchase more quickly or to purchase better supplies or equipment. Where family resources are available, it might be better to save trust funds — especially if the beneficiary is a minor, and parents have a general obligation of support.

There will, of course, be other considerations in each case. We do not mean to give an encyclopedic list here, so much as to suggest that decisions about expenditures can be very difficult. It is not enough for the trustee to really, really want to make the expenditure, or to be completely convinced it is appropriate — it is important to consider the proposal from all sides, admitting that there may be good reasons not to proceed, as well. The key is that the trustee must act reasonably, remain free from self-interest or bias, and above all, be prudent.

How Does a Trustee Act Prudently?

The best way to assure that proper decisions are made, and to minimize the possibility of later difficulties, is to seek independent advice from a qualified legal expert. While many lawyers may insist that they know how to draft Special Needs Trusts, not all of them have experience dealing with state and federal agency treatment of expenditures.

Sometimes it may be appropriate to consider the options and risks, to make an expenditure and report it to the appropriate government agency and wait for a response. Sometimes it may be better to seek the blessing of the court system, giving notice to government agencies as appropriate and asking for a determination of the validity of the proposed expenditure in advance. The Special Needs Alliance advisor you consult will be able to give you guidance with expenditures, accounting requirements and government benefits.