Special Needs Planning Attorneys in Murfreesboro, Tennessee

As you may know, everyone should have an estate plan regardless of age or wealth. However, the need for estate planning is even greater if you have a loved one with special needs. It takes careful planning to provide for a family member with a disability.

When creating an estate plan, it is vital to make proper arrangements for a child or another family member with a disability. The goal of special needs planning is to provide for a loved one who has a disability and protect their eligibility for crucial governmental benefits, such as Medicaid, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI).

At McCarter | East PLLC, our special needs planning attorneys provide legal counsel to families whose loved ones have a disability and help them develop a comprehensive plan. From our office in Murfreesboro, Tennessee, which is several blocks away from the courthouse, we provide estate planning services to clients across the state, including Berry Hill and surrounding areas.

What Is a Special Needs Trust?

A special needs trust, sometimes referred to as an SNT, is a legal arrangement that has the objective of preserving the beneficiary’s eligibility for public benefits such as SSI and Medicaid.

Most states, including Tennessee, set a $2,000 asset limit to preserve eligibility for Medicaid. Thus, an individual with a disability could lose their eligibility for public benefits when they receive assets or financial gifts over the asset limit.

However, since the assets are transferred to a special needs trust, the beneficiary does not technically own those assets and can preserve their eligibility for Medicaid and other governmental benefits. At the same time, an SNT can pay for supplemental items that can improve the beneficiary’s quality of life (e.g., the cost of nursing care, dental expenses, and other costs and expenses not covered by Medicare or Medicaid).

Some of the most prominent benefits of setting up a special needs trust include:

• You can have peace of mind knowing that your loved one will remain eligible for public benefits even if something happens to you;

• Creditors generally cannot access the assets held in the trust;

• Funds in the trust can be invested;

• You can decide who would become a successor beneficiary if your loved one dies; and

• The trust can shield your loved one from financial risks.  

These are some of the benefits of a special needs trust. If you are considering setting up a special needs trust for your loved one with a disability, consult with an estate planning attorney to discover your options.

Types of Special Needs Trusts

In special needs planning, you can choose between different types of special needs trusts:

• First-party. A first-party SNT is a trust funded by the assets owned by the individual with special needs and used for the beneficiary’s own benefit. Often, first-party special needs trusts are set up when a beneficiary is set to receive inheritance or settlement.

• Third-party. A third-party SNT is a trust funded by family members of the disabled individual or other third parties. Third-party special needs trusts are set up for the benefit of the person with special needs. Usually, third-party SNTs are funded upon the death of the person who establishes the trust.

If you do not know what type of special needs trust to choose in your specific case, speak with an experienced attorney to evaluate your particular situation and advise you on your options.

What Is an ABLE Account?

An ABLE account is a relatively new savings account that allows individuals with special needs to save money without losing eligibility for governmental benefits. The funds in an ABLE account can be used for specific expenses, including but not limited to housing, education, and transportation.

However, not everyone is eligible to open an ABLE account. An individual of any age can open an ABLE account as long as they meet the following criteria:

1. They developed their disability before the age of 26; and

2. They are currently receiving SSDI or SSI benefits or have a disability certification proving that their disability causes “marked and severe” functional limitations.

The disability certification must be signed by a licensed healthcare provider to be eligible to open an ABLE account.