SPECIAL NEEDS TRUSTS

A Special Needs Trust (SNT)-sometimes also referred to as a Supplemental Needs Trust- provides for the needs of a person with a disability by complementing rather than replacing government benefits. 

It can be a self-settled trust, meaning the money in the trust belonged to the person with the disability.  Or it can be a third party trust, meaning the trust is created and funded by someone other than the person with the disability, like a parent or grandparent.  The person with the disability can benefit from the funds while maintaining eligibility for government benefits.  The SNT supplements the government funds rather than using the trust funds solely for support.  The SNT can pay for services and equipment that Medicaid would not cover, such as the purchase of a home, special wheelchairs, handicap-accessible vans, as well as vacations, a personal attendant and recreational and cultural experiences.  The trust can be used to enrich the beneficiary’s life. 

The trust must be valid under state law and must be in writing.  The trustee of the trust has very specific fiduciary duties to the beneficiary of the trust to manage the assets properly and to see that the funds are used for the benefit of the disabled person and that his or her access to public benefits is not hindered by distributions from the trust.

If the trust is funded with the disabled person’s own funds, a "payback provision" is required to assure that the state will be reimbursed after the person’s death for the expenses paid on the person's behalf.  If the trust is funded by a third party, the payback provision is not required. 

Parents of children with disabilities often have concerns about the care and welfare of their children after the parents are gone.  Whether the child is an adult who has been cared for all his life by his parents, or is a young child with a disability, parents can make provision now to see that there child is provided for.

The first issue is finding a lawyer who is familiar with estate planning for persons with special needs.  Lois Zerrer is a member of the Special Needs Alliance, a professional organization of leading elder and disability law attorneys throughout the United States.  The best way to provide your special needs child with compassionate care and a comfortable life is to support your legal and financial decisions with reliable information and proven expertise.

GUARDIANSHIP AND CONSERVATORSHIP

Guardianship is a legal relationship whereby the Probate Court gives one person (the guardian) the power to make personal decisions for another (the ward). A conservatorship is a legal relationship where the Probate Court gives one person (the conservator) the power to make financial decisions for another (the protectee). A guardian/conservator may be appointed when a Probate Court determines that an individual is unable to care for himself/herself by reason of mental illness, mental retardation or physical incapacity.

Guardianship is appropriate when impaired judgment or capacity poses a major threat to a person's welfare. A medical evaluation by a licensed physician is necessary to establish the proposed ward's condition. However, only a court can determine the need for a guardian and/or a conservator.

Assuming that a physician is prepared to attest to the proposed ward's incompetence, a petition must be filed with the Probate Cour t requesting the appointment of a guardian. The proposed conservator may be required to file a bond with the court. Then, the court directs that close relatives and the ward him/her self receive notice of the filing of the petition for guardianship. The court sets a date by which anyone wishing to object may do so, including the proposed ward. An attorney is appointed to represent the interests of the proposed ward/protectee. Then a hearing is held where a judge decides whether a guardian should be appointed.

An appointment may last until the death of the ward or the guardian, until the ward is able to establish that he/she is competent, or until the guardian resigns or is removed by the Probate Court.

 Unless limited by the court, the guardian has total control over the personal decisions of the ward. This includes deciding where the ward will live, determining how the ward’s funds will be spent, and making routine medical decisions for the ward.

The conservator must account carefully for all of the ward's income and any expenditure made on his or her behalf. This is accomplished by the guardian filing an inventory listing the ward’s assets with the court as of the date of appointment and by filing annual accounts with the court detailing all the income and expenses the ward has. For unusual or extraordinary expenses or the sale of real estate or property, the conservator has to seek approval of the court in a separate proceeding. A final account must be filed when the conservatorship is terminated. The conservator is liable for his or her acts until the court allows (approves) the account.

There are several less restrictive alternatives to guardianship. These include the durable powers of attorney, representative payees, trusts, and health care proxies. Each of these options may avoid or delay the need for a guardian. These documents need to be executed before the individual is incapable of doing so due to mental impairment.