DISABILITY AND SPECIAL NEEDS
No one likes to think about the possibility of their own disability or the disability of a loved one.
In fact, most Americans grossly underestimate the risk of disability to themselves and to their loved ones. In a 2010 survey it was reported that 64% of wage earners believe that they have a 2% or less chance of being disabled for 3 months or more during their working career. The actual odds for a worker in today’s workforce are closer to 25%.
One in three Americans will face at least a 90 day disability before reaching age 65 and, depending upon age, up to 44% of Americans will face a disability of up to 4.7 years.
In raw numbers, over 37 million Americans, or roughly 12% of our total population are classified as disabled according to the 2010 census.
The Department of Health and Human Services estimates that 70% of all persons age 65 or older will need some type of long term care services during their lifetime.
A family with a child, grandchild or other family member who has been determined to be disabled for Social Security purposes should be aware of the unique planning requirements their family faces. There are, within this planning area, many misconceptions and planning pitfalls that require particular care and knowledge. With proper and timely planning, a family can assure for the long term care and assistance of their loved one without jeopardizing the loved one’s eligibility for either SSI or, if the loved one has worked a sufficient number of quarters prior to their being determined to be disabled, SSDI.
From a conventional planning standpoint, most families with a disabled child, grandchild or other family member are inclined to rely upon their family network for support and assistance for the disabled family member. Reliance upon a family network for support and assistance can in many instances lead to gaps in assistance, inconsistent levels of support and a multitude of mistakes that will, inevitably, result in the disabled individual losing their eligibility for support and/or medical benefits. A loss of supplemental security income due to an ineligibility determination can be harmful not only in terms of monthly support payments but also the loss of necessary medical services and treatments that the individual may be receiving through Medicaid or ultimately Medicare.
Additionally, a reliance on family members for the care and supplemental assistance of the disabled family member may result in inconsistencies in the provision of care or supplemental assistance. This might be due to a sibling’s divorce, the loss of a lawsuit against the sibling, or the sibling’s incapacity or death.
Rather than relying on a family member to provide assistance for the disabled loved one, it is possible to prepare an appropriate supplemental or special needs trust for the individual loved one with a disability. The idea behind a special needs trust is to create a fund that can be used to provide the disabled individual with items and services that are not otherwise covered by public benefits. Further, the special needs trust can provide for the prudent management of the trust assets for the benefit of the disabled individual.
Consideration of a supplemental or special needs trust can also afford the family a consistent, detailed plan of care and assistance for the disabled loved one that takes into consideration the loved one’s specific needs. There are also significant benefits to the disabled individual and their family if their parents or other family members decide to proactively establish a third party special needs trust for the disabled family member.
A properly drafted and funded special needs trust can ensure that a special needs beneficiary will have sufficient assets to care for him or her, in the manner intended by loved ones, throughout the beneficiary’s lifetime.