Estate And Special Needs Planning

What is estate planning?

Estate planning involves making plans for the transfer of all the property you own if you die or become disabled. Your property—including things like cash, cars, houses, and savings accounts—is also called your ‘estate’. Estate planning often including making sure that your estate is transferred to your children or other family members, assigning guardianship for your children if they are minors, and ensuring that you pay the least amount of taxes possible on your entire estate.

Why is estate planning important for people with spinal cord injuries?

Estate planning is important for people with spinal cord injuries because people with disabilities are uniquely affected if they are beneficiaries of someone else’s estate. If a person with a SCI is on government benefits like Social Security or Medicaid, they may lose their eligibility for these benefits if they receive money or other assets from a family member’s estate. Losing government benefits can be detrimental to people with spinal cord injuries. It is for this reason that estate planning is so important; if you have a family member with a spinal cord injury, you must plan the transfer of your estate properly, or that family member may lose the benefits they need to live safely.

What is a special needs trust?

A special needs trust is an account that allows money to be set aside for a person with a disability, all without affecting the person’s eligibility for government benefits. Special needs trusts are designed to secure extra funds for people with disabilities, while still allowing them to receive government benefits programs like Social Security and Medicaid, which rely on recipients having less than a certain amount in assets to maintain eligibility. There are many different types of trusts: the first-party trust, the third-party trust, and the pooled trust. An experience spinal cord injury estate planning attorney can help you discover what trust is best for your unique situation.

What are Qualified disability trusts?

Qualified disability trusts are third-party special needs trusts that allow for significant tax benefits. Qualified disability trusts allow for a higher personal exemption on your taxes compared to a regular trust, meaning you will pay less income tax on your qualified disability trust. These trusts can help people with disabilities save more money for their futures.

What is probate court?

Probate court is a specialized court that handles the distribution of property after someone has died. Probate court judges ensure that the deceased person’s beneficiaries receive the proper assets and that the deceased person’s debts are paid. Probates can be done with or without a will; probates without a will typically result in distributing assets to the person’s next of kin, while probates with a will typically result in distributing assets based on the beneficiaries the person outlined in their will.

To go to probate court, someone (typically a relative who is outlined in the will) has to file for probate. The court will then appoint someone to represent the state, and the court will later assist in the distribution of assets.

What is a guardianship?

A guardianship is the legal appointment of an adult decision maker, or “guardian” on someone else’s behalf. Typically, guardianship are authorized when the parents of a minor are deceased and the minor is in need of a legal adult guardian. Guardianship can also take place if an adult becomes incapable of making responsible decisions because they have become profoundly mentally disabled. Guardians can be authorized for adults with mental disabilities, and guardians can make legal, financial, and healthcare decisions on behalf of the person.

What is a conservatorship?

Conservatorships are adult guardianships in which an adult has the court-ordered responsibility to manage the affairs of an incapacitated adult. The term incapacitated can refer to adults with mental disabilities or the elderly who have lost mental capacity through aging. Conservatorships are subject to court supervision, which prevents conservators from mismanaging someone’s property or funds.

Picking the right health care agent for your future needs

Planning for your future often requires planning for your needs much later in life, especially if you have a spinal cord injury. If you have a spinal cord injury, you will need much more health care support later in life than those without a spinal cord injury. Because of this, you should consider who will be in charge of making decisions on your behalf in regards to health care. Choosing the right Health Care Proxy (or a health care power of attorney) is vital to ensuring you receive the health care you need.

While picking a Proxy or a health care power of attorney, you should choose someone who understands your health condition and medical history. You should also choose someone with a deep understanding of who you are and how you want to be treated. Lastly, you must make sure that your Proxy will take their duty seriously and will communicate your needs well.

What is a durable power of attorney and why do people with SCI need one?

A power of attorney is a legal document that allows someone the complete responsibility of acting in your place in regards to finances, assets, and healthcare. People with a power of attorney can make health care or financial decisions on behalf of another person. However, there is a difference between “durable” power of attorney and “non durable” power of attorney. While non durable powers of attorney end if you lose your mental capacity, durable powers of attorney still remain valid, even if you become incapacitated.

A durable power of attorney allows your trusted person the legal responsibility of taking care of your important matters on your behalf, even if you someday are unable to do so on your own. A durable power of attorney is essential if you have a spinal cord injury. The unfortunate reality of living with a spinal cord injury is that SCIs can bring lots of health complications; you never know when a health complication from your SCI could uproot your life forever. Assigning a durable power of attorney to a trusted person in your life assures that your assets will be protected, and that you will receive the health care you need when you are incapacitated.

Government benefits and estate planning

There are many ways you can protect your assets through estate planning, especially when you receive government benefits. ABLE accounts, special needs trusts, and Medicare can all help you receive the care you need and protect your assets as you age.

ABLE accounts are tax-advantaged savings accounts for people with disabilities. These savings accounts allow people with disabilities who receive government benefits to save money, all while maintaining their eligibility for Social Security and/or Medicaid. Visit our ABLE accounts information page for more information.

Special needs trusts can also help you protect your benefits, all while receiving financial support from a family member or other payer. There are certain restrictions on which special needs trusts count as assets, and which special needs trusts do not. Talk to an experienced estate planning attorney to discover the right special needs trust for your unique situation.

Lastly, if you receive Social Security benefits, Medicare will automatically kick in the month you turn 65. This will help you tremendously in saving the money that you may have spent on health care without Medicare coverage. Keep this in mind while planning for your future and planning the transfer of your estate.

Estate planning is essential for people with spinal cord injuries, and for family members of people with spinal cord injuries. To ensure your estate is fully protected, you must hire an experienced spinal cord injury estate planning attorney. We are here to help answer any questions you may have about this process. Contact us today at team@spinalpedia.com or fill out the form provided on this page. You are not alone in your SCI journey.