Estate planning can feel intimidating. You may be unsure how to find an experienced attorney you can trust who charges a fee that is within your budget. The vocabulary may feel unnecessarily complicated. And when you have a child with special needs, it may feel like the weight of the world is on your shoulders. Here are a few options available to families starting the process or re-evaluating the documents signed years ago.
A trust is an agreement between the person establishing the trust (settlor) and the person responsible for managing the trust (trustee) for the beneficiary. A special needs trust is the term used when the beneficiary has a disability. The trustee administers the trust but is also responsible for understanding the nuances of trust management if the beneficiary receives public benefits like Waiver, Medicaid or SSI, or is under guardianship.
There is no minimum or maximum needed to fund a special needs trust and a beneficiary of a properly drafted special needs trust can still qualify for public benefits. The trust can be funded during the settlor’s lifetime or at their death. It can be funded with assets like life insurance, real estate and stocks. Nonprofit organizations like Community Fund Ohio can assist if a family doesn’t have a trusted family member or friend to serve as trustee.
An ABLE Account is another option. Known in Ohio as STABLE, an ABLE Account is like a 529 college advantage account, but instead of educational expenses it is used for qualified disability expenses. It is established by the person with the disability or their legal representative without the assistance of an attorney. A competent adult beneficiary receives a debit card and, if administered properly, does not negatively impact the beneficiary’s eligibility for public benefits.
One shortcoming of the ABLE Account is that it can only be funded with an amount equal to the annual gift tax exclusion unless the beneficiary is also working; in 2024 that is $18,000 per year. An ABLE Account is therefore not a way to leave significant assets for the benefit of a person with a disability.
It is tempting to leave the planning for the next generation, but when a person with a disability inherits assets directly, the probate court is usually involved — which can make the details public, increase costs, and cause the process to take longer. Furthermore, the options available to a person with a disability are limited and frequently require payback to the state Medicaid agency, which can be avoided by pre-planning.
Northeast Ohio has many experienced special needs attorneys who can guide a family through the process. You can search the Special Needs Alliance, NAELA, and ASNP websites for attorney directories or contact your local bar association for a referral.
Community Fund Ohio is a nonprofit founded in Northeast Ohio more than 30 years ago and is happy to assist. You can find their trust agreements and educational materials by visiting communityfundohio.org
