A Medicaid planning lawyer can provide help to parents who have a child who is disabled. As a parent of a disabled child, you likely want to do everything possible to ensure your son or daughter has the best quality of life. This means planning ahead for what will happen to your child when you cannot provide direct care any more due to your old age or your passing.
While many parents decide to leave money for the care of a child who is disabled – and often substantial sums of money – simply giving a financial gift to a child with a disability could cause unforeseen and devastating financial consequences. The problem: if the child receives a large financial gift or an inheritance that is substantial, the child could suddenly have too many resources to qualify for means tested benefits.
Medicaid, which many disabled people rely on to pay for medical care, is one example of a means-tested benefit that could be in jeopardy. Social Security Disability Insurance, which is often the only source of income for a disabled child, is also means-tested.
Parents need to make sure they are not going to undermine the future financial stability of a child with a disability simply by giving a financial gift that was meant to improve the child’s life. A Medicaid planing lawyer can assist parents in taking steps to ensure that an inheritance is helpful and not harmful.
How can a Medicaid Planning Lawyer Protect a Disabled Child’s Benefits?
A Michigan Medicaid planning lawyer can assist parents in determining if an inheritance or a gift given during the parent’s lifetime could result in a child becoming unqualified for SSI, Medicaid, and any other means-tested benefits programs. An attorney will explain what the rules are for program eligibility and whether the value of the inheritance or gift is a disqualifying factor.
If the disabled child would have too many resources to qualify for Medicaid after receiving money from parents or other relatives, an attorney can help to structure the gift in such a way that the assets provided for the care of the child do not count as resources for needs-based programs.
Through the creation of a special needs trust, the assets that are provided to a disabled child will belong to the trust, not the child, and won’t count as assets for purposes of qualifying for Medicaid or other benefits. The money in the special needs trust — which is to be used to enhance quality of life for the disabled child — will be managed by a trustee chosen by the parent or relative who created the trust.
The funds can be used for virtually any supplemental needs of the disabled child, with some limitations mainly designed to ensure the trust assets are not essentially cash equivalents for the child. The trust, for example, can’t pay rent for the disabled child because that would be considered to essentially be a form of cash since other money would be freed up because the disabled child no longer must use the cash to pay rent. If in kind gifts are provided which are viewed as the equivalent of cash, this could create problems regarding eligibility for Medicaid.
Parents can determine how trust assets should be used to provide the best life possible for their disabled child and can provide instructions in a trust document for the special needs trust. For example, parents could specify that funds are to be used to buy clothing for the child or that funds should be used to indulge a hobby that the disabled child enjoys partaking in. When a parent creates a special needs trust and provides instructions, this ensures the funds are used to provide a better life for the disabled child. Since the child does not directly own assets and cannot directly access the assets, benefits are not affected.
Getting Help from A Michigan Medicaid Planning Lawyer
Biddinger & Estelle can provide parents of disabled children with invaluable assistance with the entire estate planning process, including making plans to leave an inheritance to a disabled child to make that child’s life better. Attorneys at our firm know the rules for benefits eligibility for the programs that most disabled children depend upon, and we can help parents to work within the rules while providing for a child’s supplemental needs that government benefits do not cover.
To find out more about how a Michigan Medicaid planning lawyer can help you provide financially for your disabled child while protecting access to benefits, give us a call at (989) 872-5601 or contact us online.