The patchwork of government programs for adults with disabilities, and their varying eligibility rules, create complications and traps. But more financial planners are aiming to help. ?
The government benefits catch is something that even better off families need to think about, says New York estate planning lawyer Bernard A. Krooks, a past president of the Special Needs Alliance. “The cost of caring for an individual with special needs over his or her lifetime can be catastrophic,” he says. “Even wealthy families have to address these issues, ideally by putting a contingency plan in place to let government benefits kick in if and when necessary, for example.
Note that those Medicaid services have long waiting lists, which is why families with sufficient financial means should be making any preparations they can on their own. Another gotcha to be aware of: eligibility rules for Medicaid benefits have not only changed over time, but vary by state. “It’s important to seek out experts dedicated to special needs planning in the state where you’re located,’’ Krooks says.“Holistic, broad financial planning can be really critical,’’ says Shenkman.
Another reason planners are in the middle: parents of special needs children have to save and plan for their own retirements, even as they provide for their child’s long-term care after they’re gone. Insurance policies can be an effective tool for funding SNTs, Weisz notes. A few other members of this team effort are crucial: the person who will serve as a trustee for any SNT or other trust when the parents are gone, as well as a potential guardian, if needed. “The knee-jerk reaction is to appoint Uncle Joe or Aunt Jane, but the rules around SNTs are not simple,” says Shenkman. He suggests families consider naming an institution or specialist as a trustee or co-trustee with a family member, to make sure there is no inadvertent disqualification from public benefits.
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