Disabled Person - Needing Supplemental Needs Trust
If you're disabled, here's how to maximize
your Medicaid benefits while holding on to
your money, income and assets.
In many cases, disabled individuals who were hurt in an accident or were victims of medical malpractice receive substantial sums as a result of personal injury lawsuits. In other instances, people with disabilities are beneficiaries of inheritances from relatives, designated for their future care.
If you're disabled, getting even a modest amount of money can jeopardize your Medicaid benefits and Supplemental Security Income. The disability lawyers at Lamson & Cutner have specific proven strategies for protecting these government benefits, while permitting you to enjoy the use of any sum you may receive.
The danger for the disabled.
If you receive proceeds from a lawsuit, inheritance or gift, without proper planning Medicaid will terminate your benefits. You'll lose your Supplemental Security Income from the Social Security Administration for the same reason. You won't get them back until almost all of the money is dissipated. For many, this is very destabilizing.
For Supplemental Security Income, you must have little or no income to qualify, and less than $2,000 in assets if you're single. For Medicaid, a single individual can have no more than $787 in income in 2010, and only $13,800 or less in assets to be eligible.
This means that money that could have been devoted to a lifelong improvement of your finances now ends up being quickly exhausted. You have to pay expenses Medicaid used to cover, as well as losing Supplemental Security Income you'd otherwise have.
Financial protection for the disabled person.
Attorneys at Lamson & Cutner have successfully used the following time-tested strategy to protect income and financial assets for many disabled clients. Here's how it works:
If you're under 65 years old, the law allows the creation of a "first party" Supplemental Needs Trust, which is established and funded with your own money. This is a legal structure that's formed to protect the assets of a disabled person, without jeopardizing his or her Medicaid or Supplement Security Income benefits. 
These are referred to as "pay back" trusts, meaning that after you pass on, whatever is left over in the trust is first used to reimburse Medicaid. You might also hear it referred to as a Self Settled Trust.
If you're over 65, other special protective trusts can be used, depending on your unique circumstances. These can also deliver excellent results.
If you are to receive money through an inheritance or a gift, a variation of the strategy works even better. The person who wants to provide money for you sets up a "third party" Supplemental Needs Trust to receive and secure the funds from New York Medicaid eligibility requirements, and Social Security regulations. This averts the difficulty of the money going to you directly, causing you to lose your benefits. In this scenario, your age does not matter, and there is no "pay back" provision.
Another advantage of the third party Supplemental Needs Trust is that a person who may wish to give you money now can set it up while they're alive, or leave it to you under their Last Will and Testament. It's a flexible asset protection tool.
Many of the legal and financial strategies for assisting a disabled person are drawn from the practice of Elder Law. It has a vast array of methods for guarding money, income and assets for those with debilitating illnesses and injuries, and for providing future financial support. A Lamson & Cutner attorney can give you more information on these planning techniques.
The benefits to you.
These legal procedures allow you to continue to qualify under Medicaid and Social Security asset and income limits. Legally a trust is a distinct entity, considered to be a separate "person" in effect. So the money is not regarded as being yours. You become exempt from rules that would force you to pay your own expenses, which would normally be covered by government benefits.
That means Medicaid can't come knocking on your door, asking you to contribute the money you received to the cost of your own care. You get to keep your existing benefits, and protect the additional money you've received for your long-term financial security.
Additionally, a trust gives you protection from future creditors, not just Medicaid. If you are the target of a lawsuit concerning a claim arising after the trust was created, any money in it is sheltered and you don't have to worry about losing your financial security.
Protecting the future of a special needs child...
Any family with a special needs child can receive major benefits from effective planning. Severe disabilities such as autism can impose major financial burdens on parents. A major concern is the question of who will care for the child when the mother and father are gone. Elder Law, Medicaid and estate planning techniques are critical to the child's future financial, physical and emotional well-being as an adult.
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Here's an example involving a Lamson & Cutner Elder Law client:
In a case L & C handled involving disability, a woman was in a nursing home on Medicaid, and she unexpectedly received a $1,000,000 inheritance from her sister. A family friend immediately contacted the firm, and a strategy was devised to protect the woman from losing her Medicaid benefits, and to preserve the money for the care of her disabled son. In the absence of these measures, a significant portion of the $1,000,000 inheritance would have had to be contributed towards the payment of the mother's nursing home care. The family received a major financial benefit, won through effective planning and legal representation.
In other instances, a disabled person's circumstances will involve more extensive planning procedures. Here's another actual case:
The firm represented a single, middle-aged man suffering from traumatic brain injury. L & C moved his assets to a protective trust, and shifted his excess income to a pooled income trust, so that it could still be used to pay his bills. This enabled him to receive Medicaid benefits, and to be placed on the Traumatic Brain Injury Waiver Program, allowing him to get extra services for his special needs.
You can find out more about these asset protection strategies in Lamson & Cutner's new Special Report, 25 Strategies to Prevent Financial Ruin from Long-Term Health Care Costs. It's filled with proven approaches, it's free and you can download it here.
Call the law firm of Lamson & Cutner today to learn about protecting your financial future. You may have options and rights you're not even aware of. The number is toll free: 1 (877) 303-1414.