Graduation. It is a rite of passage for nearly every child. For special needs children, it is still that rite of passage bringing a sense of accomplishment and pride to the child and to the family. It is also a time for new challenges for parents as preparation for their child’s life as an adult with disabilities and special needs must be carefully planned as many of these adults will never live alone, hold a job, or drive a car. Services for treatments, care, education, and adaptations for daily life, just to name a few are expensive and can even require a parent to leave a job to become a full-time caregiver. Options require detailed knowledge to be able to navigate the many rules and structures that exist. An experienced estate planning attorney with expertise in working with families with special needs adults can mean the difference between your child’s ability to thrive or fail as a young adult.
What To Do When Your Special Needs Chile Becomes Adult
When your child is a minor, he or she may receive Medicaid, or as it is known in Arizona, Arizona Health Care Cost Containment System, and Supplemental Security Income or SSI based on your income. After age 18, your child’s financial assistance will hinge on his or her assets and income, even if he or she continues to reside in your home. If your child can make his or own decisions, he or she is able to. If your child is unable to make these decisions, a guardianship and or a conservatorship may be the best option.
Guardianship for Special Needs Adult Children
If your child can take care of himself or herself with assistance, a limited guardianship may be all that is needed. Otherwise, if your child requires round the clock care and oversight, a general guardianship is a likely recommendation. Guardianship is a court proceeding where the court appoints an individual or an entity, such as public fiduciary, to make care decisions for the adult. In Arizona, a priority list of individuals serves as a guideline for the court however, if a person not identified on the list is in the adult’s best interest, the court could choose that person.
Obtaining and maintaining a guardianship can be costly, time consuming and difficult. There are alternatives that may be better options depending on your child and your individual situation. You may use these alone or in combination to support the adult child in helping him or her be as independent as possible. Making these decisions can be confusing and stressful when you are unsure of all of the options.
Among the alternative tools is a special needs trust. It can be an answer to allowing your child to continue to qualify for Medicaid and Social Security Benefits as an adult. While the funds used to establish this kind of trust are tax deductible, there are limitations on what the funds may be used for. For example, the funds cannot be used to pay creditors which often accumulate in the heavy load of caring for a special needs adult. Instead the funds may only be used to pay for the care and services needed for the special needs adult to live.
One downside of a Special Needs Trust is its cost. Annual fees to set it up can be high and the cost to fund the trust also can be a barrier for some families. Another potential negative is the lack of independence experienced by the beneficiary of the trust. Each time the special needs adult wants something, he or she must ask the trustee who has the full discretion of whether to agree to the distribution or not. This can lead to the beneficiary feeling frustrated and boxed in by the trustee. Lastly, certain funds in the special needs trust must be used to repay Medicaid on behalf of the beneficiary. If this occurs, the trust could be completely depleted either when the beneficiary dies or through the official end of the trust.
If your child is approaching graduation or you are getting a jump on planning for when your child will graduate, having an expert to advise you on your best options can make all the difference. When you are ready to review your family’s options, contact my office for help on understanding the full picture of preparing for your child’s future as an adult. The more information you have, the greater your ability to advocate for the very best scenario for your child. Call Me today.