Estate and special needs planning is defined as the process of making plans for the transfer of all of your assets and property when you die or if you become severely disabled. Your assets and property is called your ‘estate,’ and your estate includes aspects such as your home, car, cash, investments, and bank accounts. Estate planning includes the following processes: transferring your assets to your children or spouse after death or severe disability; minimizing the amount of taxes you pay on your estate upon transfer; and assigning guardianship for your children if they are below the age of 18. Read below to learn the importance of estate and special needs planning.
Estate planning is essential for people who have sustained spinal cord injuries. Without proper special needs and estate planning, people with disabilities can be negatively affected by receiving part of someone else’s estate. This is because of the income and asset limits that are set on government programs such as Medicaid and Social Security. If a person with a disability is on one of these programs, and they receive a part of someone else’s estate, the person with a disability can become ineligible for these programs and lose their needed benefits.
If you are a person with a disability or spinal cord injury, or if you are the family member of someone with a disability or spinal cord injury, it is essential for you to consult with an experienced estate and special needs planner.
A special needs trust is defined as a savings account designed for people with disabilities to save money without affecting their own government benefits. A special needs trust is designed to allow individuals with disabilities the opportunity to save money, all while not losing their benefits such as Medicaid and Social Security Disability. Many people with disabilities become ineligible for these government benefits due to income and asset limits; special needs trusts bypass this issue, as money in a special needs trust is not considered normal income or assets in the eyes of the government.
There are several different types of special needs trusts, including first-party trusts, pooled trusts, and third-party trusts. Consult with an experienced DC special needs estate planner to determine which special needs trust is right for you. The Spinal Cord Injury Law Firm is here to help you plan for a financially stable future.
There is a special type of third-party special needs trust that allows for individuals to save a significant amount of money long-term: these are called qualified disability trusts. Quality disability trusts have high personal exemption rates on taxes, meaning an individual with a disability will pay much less in taxes on their qualified disability trust compared to a normal savings account. People with disabilities save significant amounts in tax benefits through these kinds of trusts. Talk to an experienced DC special needs planner to discover if a qualified disability trust is right for you.
When you receive government benefits, you need to pay careful attention to how you protect your assets. There are many estate planning strategies you can utilize to save money in the long-run, including ABLE accounts, special needs trusts, and Medicare.
ABLE accounts are savings accounts for people with disabilities that allow individuals to save money through tax advantages. People with disabilities can utilize an ABLE account to save money, all while keeping their Medicaid and/or Social Security benefits. There are certain restrictions as to how much a person can store in their ABLE account before losing eligibility for government programs. Talk to an experienced disability estate planner at The Spinal Cord Injury Law Firm to learn more.
Special needs trusts can also help you protect your assets. Special needs trusts allow a person with a disability to receive financial support from another individual, all while maintaining their own eligibility for needed government programs. Some special needs trusts are counted as assets through the eyes of the government, while others are not. Talk to your special needs planner to learn more about your unique situation.
Medicare can also help you protect your assets by saving you a significant amount of money in medical costs once you turn 65. You are automatically eligible for Medicare once you turn 65, meaning you will save lots of money as Medicare pays for your medical appointments and supplies. Keep your automatic enrollment in Medicare in mind while you plan your financial future.
Probate court is an important aspect of estate planning that is important to understand. Probate court is the court system that helps distribute the estate of a deceased person. Judges in probate court decide how the person’s estate shall be distributed, and probate judges also ensure that the deceased party’s debts are paid before the estate is transferred. Probates can be conducted with a will or without a will. Through a will, the deceased person can dictate which beneficiaries receive their estate; however, without a will, a probate judge will typically distribute the person’s estate to the person’s spouse and/or next of kin. Going to probate court involves a relative having to file for probate. Once a relative files for probate, the probate court will appoint an individual to represent the deceased person’s estate. The court will then help distribute the assets.
An experienced estate planner in DC can help you navigate probate court. Contact us today if you need probate court assistance.
Two aspects that fall under estate and special needs planning are guardianships and conservatorships. Guardianships are when someone is legally appointed to be the adult decision maker of another person. Typically, guardianships happen when a minor’s parents are deceased, and the minor is in need of a guardian. However, guardianships can also happen when an adult becomes mentally disabled to where they cannot make responsible decisions on their own. Guardianships can be assigned to adults with mental disabilities so they can receive assistance in making responsible financial, legal, and healthcare decisions.
Conservatorships are similar, but not identical, to guardianships. Conservatorships are appointed adult guardianships for adults who are incapacitated. Incapacitated adults can include adults with severe mental disabilities or elderly individuals with lost mental capacity. A Conservator’s role is to make financial decisions on behalf of a person who is unable to make decisions related to money and finances on their own. The main difference between guardianships and conservatorships is that conservatorships are subject to supervision by a court, preventing conservators from making harmful decisions relating to the individual’s estate.
We have experience in helping families with disabilities navigate the guardianship and conservatorship system. Contact us today to receive legal help with the guardianship or conservatorship process.
Estate planning also involves planning for your medical needs later in life. This is vital, especially if you have a spinal cord injury. People with spinal cord injuries need significantly more medical care than those without spinal cord injuries, meaning that they need to comprehensively plan for their medical future. Luckily, there is what is known as a health care power of attorney, also known as a Health Care Proxy. You have the legal right to choose someone who has the power to make medical decisions on your behalf.
When choosing a Health Care Proxy, choose someone who knows your health and medical history well. Make sure to pick someone who has the time and empathy needed to help take care of your medical needs. A Health Care Proxy can help you make informed and responsible medical choices as you age and/or lose mental capacity.
“A power of attorney” is an agreement that grants someone responsibility for another party’s financial, medical, and/or estate decisions. You can legally give someone a power of attorney so they can make your financial or healthcare decisions. However, there is a huge difference between a durable power of attorney and a non-durable power of attorney. Keep this difference in mind while planning for your future.
A durable power of attorney gives you the opportunity to allow a trusted individual full responsibility for your important matters. People typically appoint a power of attorney when they are aging or becoming incapacitated due to disability. A durable power of attorney allows the person full legal responsibility of your matters, even if you become fully incapacitated. However, a non-durable power of attorney agreement, unlike a durable agreement, ends if you become incapacitated. Making sure your power of attorney is durable is essential, especially to those living with SCI.
The unfortunate reality of living life with a spinal cord injury is that having a spinal cord injury can lead to many health complications. You never know when a major health complication will pop up, and you need to be prepared in case this happens. Assigning a durable power of attorney assures you that someone you trust will take care of you and your estate if you lose your mental capacity.
While estate and special needs planning can be complicated, estate and special needs planning is essential when it comes to planning for a financially stable future. People with disabilities and families of people with disabilities must consult an experienced estate planner to ensure they can live a financially stable life. Luckily, The Spinal Cord Injury Law Firm has experience in disability estate planning, and we are here to help you navigate you and your estate’s future. Contact us today at 1-877-SCI-FIRM or firstname.lastname@example.org for a free legal consultation.
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After my wife had a traumatic brain injury we had so many questions. Kelley took the time to answer all of our questions and worked hard for us. Kelley is an excellent lawyer. We were lucky to have her guide us through a difficult time. – Jose