An Overview of Estate Planning for Someone with Special Needs in Florida

If you have a family member with special needs, you will need to rely on some unique estate planning mechanisms to ensure they are well taken care of should something happen to you. One of the biggest mistakes you can make for your disabled relative is to assume that government benefits (SSI, Medicaid, etc.) are sufficient for their care. While these programs provide the basic necessities —food, housing, and/or medical aid — they do not provide any luxuries or special comforts.

Establish a special needs trust sooner than later

It’s impossible to predict what the future holds. However, if you have a special needs family member in your life, you must establish an estate plan that contemplates their lifetime needs as soon as possible. Without a special needs trust in place, your loved one may be ineligible, even for basic necessities from government benefit programs, if tragedy suddenly befalls you.

A trust is a legal agreement that allows one person (a trustee) to hold assets for the benefit of another person (beneficiary). For example, if you are the parent of a disabled child, you could create a special needs trust where you and other family members contribute money. Then, your child can benefit from the use of the money in the trust to pay for certain things throughout their life. A trustee can ensure the money is used in accordance with the terms of the trust.

Creating a special needs trust for your disabled loved one

A skilled lawyer can help you create a special needs trust for your family member that will not disqualify him or her from receiving government benefits. Special needs trusts provide for luxuries and comforts not afforded by government programs. For example, special needs trusts can be used to pay for recreational activities, counseling, education, medical attention, and more.

Depending on the situation of the beneficiary, a first-party or third-party trust may be used:

  • First party trusts — A first-party trust is established from a beneficiary’s own resources. Typically, these trusts are funded from unexpected gifts, inheritance, accidents, or medical malpractice claims. The three types of “safe harbor” trusts (that is, trusts that do not inhibit the eligibility of Medicaid or SSI) are Disability or d4A trusts, Qualified Income or d4B trusts and Pooled or d4C trusts. However, each of these three trusts require Medicaid payback upon the death of the beneficiary.
  • Third-party trusts — As the name implies, third-party trusts are funded by a third party — someone other than the beneficiary. Unlike first party trusts, there is no payback to Medicaid when the beneficiary dies. Depending on your loved one’s situation, you may choose to establish either a stand-alone or stand-by special needs trust.

An experienced can help you navigate the law and assist you in choosing the type of trust most suited for you or your loved one.

Founded in 1999, The Law Offices of Hoyt & Bryan is committed to serving clients throughout Florida. If you need help creating a special needs trust, establishing a pet trust, drafting a will or trust, or resolving an elder law dilemma, don’t hesitate by contacting us today.

Peggy R. Hoyt - The Law Offices Of Hoyt & Bryan
About the Author: Peggy Hoyt
Peggy R. Hoyt practices in the areas of family wealth and legacy counselling, including trust and estate planning and administration, elder law, small business creation, succession and exit planning, real estate transactions and animal law.