Just as caring for a dependent with special needs is a family affair, so is the related planning. It is recommended that caregivers host a meeting with family/friends to discuss the future medical, educational, and housing needs of their dependent with special needs. Share information about your and your dependent’s vision of the future and discuss any concerns and options for future care.

Special Needs Trust

If you have a Special Needs Trust already established or plan on setting one up, explain to your family that money can still be left to an individual with special needs by listing your dependent’s special needs trust as the beneficiary. Explain what a special needs trust is in general and how it can benefit your loved one with special needs. A special needs trust may offer a means of protecting a dependent with special needs’ eligibility for government benefits, while addressing their ongoing care and needs. In general, a trust is an arrangement by which property is held by one party (the trustee) to benefit someone else (the beneficiary).

Different types of trusts suit different needs and may have different tax implications. A trust created to benefit a person with special needs can: Receive assets such as an inheritance, a court settlement, an insurance claim payment, gifts of money, or life insurance proceeds. It can protect current or future government benefits and pay for medical care, special equipment, education, entertainment, transportation and more. Consult an attorney who has experience with special needs planning. A financial professional.

ABLE Accounts

If your loved one with special needs has an ABLE Account already, share this information with your family/friends and explain what an ABLE Account is.

What is an ABLE Account? ABLE (Achieving a Better Life Experience) accounts allows eligible individuals with special needs who have a disability that manifested itself before the age of 26 to open tax-advantaged savings accounts. Only one ABLE Account can be opened per eligible individual. The account can be established by the eligible dependent with special needs, or their parent, legal guardian, or agent acting pursuant to a power of attorney. ABLE Accounts are developed and managed on a state level. Most states allow deposits from out of state residents so even if your state does not have the program you may still be able to sign up for another state’s account. Contributions can be made by anyone, including the dependent with special needs, family members, friends, etc., and must be made in cash. There are annual contribution limitations, as well as maximum accumulation amounts. Any amounts over the maximum accumulation amount could affect the dependent’s eligibility for government benefits. The funds accrue income tax free and can be used for a range of expenses related to the disability of the dependent. Upon death of the dependent with special needs or termination of the account, there is a Medicaid pay-back provision in most states regardless of who deposited the funds.

Your Team of Professionals

It’s important to pull together a support team of professionals that can help guide caregivers through the variety of options available to plan for the future care of dependents with special needs. The composition of the team may vary depending on your unique situation, but it should include professionals who have experience in working with special needs families, such as a special needs financial advisor, a special needs attorney and perhaps a health professional and a school guidance counselor, among others. Advise your family who will be on your ‘Team’ to assist you with executing your plan for your loved one’s future.

 

Please contact Scott E. Pettyjohn at Topside Financial, LLC for a review of your Financial Future (540) 273-6549

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Securities, investment advisory and financial planning services offered through qualified registered representatives of MML Investors Services, LLC Member SIPC, www.sipc.org Supervisory Office: Overlook 1, 4880 Sadler Road, Suite 110, Glen Allen, VA 23060-6151, Tel: 804-346-1011. Topside Financial, LLC is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies