Texas Special Needs Planning

For parents with children who have special needs, it is especially important to plan for the future. Children with special needs often rely on needs-based government benefits such as Social Security benefits or Medicaid benefits. Over the life of the child, this benefit can be substantial. However, if a child inherits a large sum of money or receives an award from a lawsuit, they may become ineligible for these important benefits. Special needs planning focuses on ensuring that children receiving government benefits are afforded access to funds in a way that doesn’t jeopardize their eligibility for benefits and allows for proper management of the funds. At McCulloch & Miller, PLLC, our Houston special needs planning lawyers have decades of experience helping families create effective plans to ensure that their children are cared for well into the future.

Trusts are a common special needs planning tool. A trust is a formal legal relationship consisting of at least three parties. The grantor creates the trust, naming a trustee to oversee the administration of the trust for the ultimate benefit of the beneficiary.

The purpose of a special needs trust is to allow the person with a disability or other special need to have access to much-needed assets without impacting their needs-based benefits. Assets placed in a special needs trust do not count towards a person’s “assets” for the purposes of Social Security or Medicaid eligibility. At the same time, beneficiaries can use funds in a special needs trust to pay for a wide range of supplemental expenses, such as:

• Assistive devices (including wheelchairs);
• Computers and other technology;
• Insurance premiums;
• Job training expenses;
• Medical expenses that are not covered by other sources;
• Public transportation costs;
• Recreation and entertainment;
• Start-up money for a business;
• Therapy or rehabilitation costs;
• Tuition expenses;
• Vacations, including paying for a friend or family member; and
• Vehicles.

However, special needs trusts cannot be used to pay for everyday expenses, such as food and housing. If the assets in a special needs trust are used to pay for non-qualifying expenses, the amount paid will be considered “countable income” for the purposes of Medicaid and Social Security benefits.

A third-party special needs trust is created by someone other than the beneficiary, such as a parent or grandparent. Family members might include provisions in their last will and testament to create a special needs trust upon their death. Alternatively, they can create a standalone special needs trust during their lifetime that the parents or other family members can contribute to over time.

A first-party special needs trust is funded with the assets of the beneficiary. First-party special needs trusts are often created after an individual comes into a large sum of money, such as through a personal injury lawsuit or after receiving an inheritance.

A support trust is similar to a special needs trust in some ways, but with some key differences. Unlike a special needs trust, a support trust requires the trustee to make distributions to pay for expenses related to food and shelter. However, beneficiaries of a support trust are not eligible for Social Security or Medicaid benefits, making these trusts a less-than-ideal choice for any individual who currently or plan to receive these benefits.

If you have a child with special needs and have not yet made arrangements for their ongoing support, contact the Houston estate planning law firm of McCulloch & Miller, PLLC. Our lawyers have an in-depth understanding of the rules governing special needs trusts and have helped countless families create effective estate plans that provide them with peace of mind for years to come. We also recognize that no two families’ situations are the same and take the time necessary to understand the full extent of your needs to best serve you. To learn more, and to schedule a consultation with a Houston special needs planning lawyer, call McCulloch & Miller, PLLC, today at (713) 333-8900.

Planning for your loved one with special needs requires extensive research to become a well-educated advocate. McCulloch & Miller, PLLC provides assistance to you and your family in addressing your unique concerns. We hope this Special Needs Resource Center provides you with a quick reference to find the additional resources you may need.

• Social Security Resources:
  Benefits for Children with Special Needs
  Social Security Benefits Eligibility Screening Tool
• Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, education -- all without interfering with the beneficiary's SSI, Medicaid or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer.
• Exceptional Parent online: Online resource for the special needs community, including families, caregivers, physicians, allied health care professionals, and teachers.
• The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
• National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
• Center for Parent Information and Resources: The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this interactive map to find the PTI or CPRC that serves your State or territory.
• Annual Disability Statistics Compendium: This publication, the first Compendium, focuses on state-level statistics published by Federal agencies.