Future Planning in Case of Your Own Special Needs or Medical Crisis

Future Planning in Case of Your Own Special Needs or Medical Crisis

When you work on future planning for your family, including a child with special needs, you may want to consider that you may have special needs or a medical crisis at some point. Fortunately, there is a way to incorporate your potential future needs into your plan and assist your child at the same time. You can set up a special needs trust, contribute money to it, and later still be eligible for Medicaid long-term care.

What Kind of Special Needs Trust Should You Use?

To contribute money toward your child’s needs while maintaining your child’s eligibility for government benefits, you can set up a third-party special needs trust. This kind of trust will directly benefit only your child with special needs. You can fund the trust right away with money from savings or other assets such as real estate. Also, you can make the trust the beneficiary of your pension, 401(k), or other retirement savings plan.

Any money or property held by a third-party special needs trust does not count against your child’s income or assets for purposes of SSI and Medicaid eligibility. Your child will not have access to the money until the trustee disburses it to pay for specific expenses such as specialized medical care or educational needs.

How Will a Third-Party SNT Affect Your Own Benefits Eligibility?

If you are planning for your own potential health needs, you should consider your eligibility for Medicaid long-term services and supports (such as skilled nursing care). Unless you are over age 65, you will probably have to meet the same income and assets requirement as your child with special needs to qualify for Medicaid.

When you place some of your assets in a special needs trust (or another type of trust), the government counts that money against your assets limit for five years. After five years has passed, these assets no longer count as “yours” for Medicaid purposes.

If you are planning to set up an SNT, consider contributing as much money as possible early on. That way, if you do need nursing care or other Medicaid services in the future, the five-year period will have expired. Then you will not have to worry about the money in the SNT counting against your assets limit and jeopardizing your eligibility for Medicaid.

Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@rubinlaw.com or call 866-TO-RUBIN.