Tips for Purchasing Special Needs Housing

If you or a loved one is searching for physical, developmental or special needs housing, there are some tips to consider before you begin the process. The US Department of Housing and Urban Development (HUD) website lists state, local government, and other organizations that can help you. At the federal level, the agency also provides information about HUD’s Section 504 regulations that define federal financial assistance, in particular, Section 811 outlines its program for Supportive Housing for Persons with Disabilities. It is important to research what assistance is available before contacting a realtor.

Once you have a strategy in place to utilize available programs to minimize costs, it is time to think about the housing location. Is the special needs individual employed or a student? Can they drive a car or do they need to be near public transportation to get to work or school? If the individual is a K-12 student, pay particular attention to school and after-school programs. Research what is available as many schools have programs for children with special needs that are offered outside of the standard school zoning in some neighborhoods. Also, take into account the proximity of hospitals and doctors. Consider the location of shopping (food and otherwise), dining and entertainment.  Be sure to note whether there are any restrictions regarding support animals (if relevant to you or your loved one).

Once the location list is narrowed down talk to others who have faced the same special needs housing challenges; whether it is a support group, school parent message boards, housing assistance advocacy group, or online forum you can save a lot of time and money by learning from others who have gone before you. In these discussions ask a lot of follow up questions. Dialing into the details can help save you missteps in your process.

Once you have identified a general location that meets some of the criteria above, it is time to canvas the availability of appropriate homes. When thinking about the layout and design of a home consider the rambler or ranch style house. They have a long low profile, very few stairs to navigate (if any) and have minimal exterior and interior decoration. These rambler attributes make the home reasonably easy to modify.

If mobility is an issue, look for a house with smooth floorings such as hardwood floors or laminate flooring. Smooth surfaces provide easier access to shower and bathroom areas. Also, check to see that the doorways in the home are wide enough to accommodate a wheelchair. Assess how many modifications would be required to address your or your loved one’s needs while remaining within a budget. Grab bars, ramps, and other similar amenities are reasonably simple to add, and some states, cities, and counties will help pay for the modifications.

Not only are there federal, state and local agencies to help you meet the requirements of special needs housing, there are also lenders and realtors who specialize in financing and purchasing this type of home. A good lender and realty agent will be familiar with the agencies and government programs that can help their client get approved for a loan and maneuver the housing marketplace for the right fit.

Realtor.com, Zillow, Homesnap, and Redfin are just a few of the online options to explore real estate from your home or mobile device. Just plug in an address of a home in the area that meets your criteria and you will get stats on that home as well as an aerial map of the neighborhood that allows you to click on and get information about homes that are not currently on the market but may be soon.

Realize this process takes time. Identify a strong, competent real estate agent who understands your special needs parameters and is willing to put forth the time to find the right special needs housing solution for you. Also, speak with a trusted attorney to ensure you have maximized all potential program benefits available to you. Buying a home is probably the biggest purchase you will make in your life. Buying a home that accommodates special needs adds a layer of complexity that should be well thought out before hiring a realtor.

If you have questions or would like to discuss your particular situation, please don’t hesitate to reach out.

Special Needs Trusts

 

In general, a trust is created when property or assets are managed by a person or firm for another person’s benefit. The person or entity who manages the trust is known as the “trustee” and is entrusted with the responsibility of making decisions in the best interest of the person who benefits from the trust, known as the beneficiary. Trusts are advantageous because they provide the ability to place conditions on how and when your assets will be distributed when you die, reduce estate and gift taxes, and allow you to skip the lengthy and expensive probate process.

Special needs trusts are a class of trusts made specifically for the benefit of those with physical and/or mental disabilities. These differ from the typical trust due to the special conditions that often need to be in place to accommodate the specific needs and lifestyle of the beneficiary of a special needs trust. Another one of the main reasons for having this type of trust is to ensure the beneficiary does not render him/herself ineligible for government benefits due to an increase in assets.

Choosing the right trustee for a special needs trust is extremely important and the trustee must be someone you are certain will act in the beneficiary’s best interest after your death. Often, this takes place in the form of a trusted family member who knows the beneficiary and his/her needs. However, if your situation doesn’t allow for this, the court will appoint a third party to manage the trust according to your written wishes.

One of the important features of a special needs trust is that the assets in the trust will not be counted toward asset thresholds contained in government programs such as Supplemental Security Income (SSI) and Medicaid. The trustee has complete control over the assets in the trust, instead of the beneficiary. For this reason, government programs such as SSI and Medicaid ignore assets in a trust when determining eligibility. Many people are unaware of this and make the mistake of distributing their assets to a loved one with special needs through a will. This could cause them to exceed the asset limits for SSI and/or Medicaid, thus losing their benefits from these programs.

Special needs trust may also be set up to take the proceeds from a legal settlement on behalf of the person with special needs. This is important for the same reason as mentioned earlier, to ensure a windfall does not preclude the beneficiary from receiving government benefits. Also, in the event the person with special needs is the one being sued, the funds in the special needs trust are protected from being paid out in damages.

Even if you believe your loved one with special needs will never need government benefits, it is still prudent to consider a special needs trust. Special needs trusts can provide for the unique and specific needs of the beneficiary in ways that other types of trusts cannot. Further, you never know what may happen in the future, especially when you’re no longer around. It may turn out that your loved one needs these government benefits one day and they’ll be glad you provided them this option.

Special needs trusts are an excellent vehicle to ensure your loved one with special needs is taken care of in the event of your passing. However, they can be difficult to set up and it is advised that you consult an elder law attorney who will be able to examine your specific situation and make sure your loved one is taken care of for years to come. If you would like to speak with an attorney regarding your situation, or have questions about something you have read, please do not hesitate to contact our office.

What to Consider When Selecting Backup Financial Caregivers for A Special Needs Loved One

When planning for a loved one with special needs, it’s important not just to consider the here-and-now, but also the rest of their lives. Although it can be hard to think about, this includes, planning for a time when his or her parents or guardians are no longer alive.

It’s a scary thought, but not one without options. Chief among them, are Special Needs Trusts, a critical part of estate planning.

These trusts are legal arrangements designed to financially support special needs individuals without compromising their ability to qualify for valuable important government benefits. These benefits can include monies and benefits through Supplemental Security Income and Medicaid. Further, the trust can outlive a parent or guardian and hold and manage property for special needs beneficiaries. This trust can provide for them but will not give them direct control over their assets if they lack the legal capacity to handle their own affairs.

Special Needs Trusts can be established at any time but will require a trustee to make decisions on the special needs person’s behalf. Often, a parent or guardian who knows the disabled individual best will first serve in this capacity.  Bear in mind, if the trust grows, it may become more complicated to manage. Furthermore, if parents or guardians can no longer serve as the trustee, or if they become ill or pass away, selecting the right back-up could be the single most impactful decision affecting the special needs person’s future.

Here are several questions to consider when choosing a back-up financial caregiver:

  • Does he or she understand the special need beneficiary’s situation and needs?
  • Can he or she maintain communication between the special need person, caregivers, and service providers?
  • Is he or she able to hire and regularly monitor agents and service providers?
  • Will he or she be able to pay bills, help secure housing, and medical care?

Other items that may require technical expertise, and involve a conversation with your estate planning and elder law attorney, include:

  • Becoming knowledgeable about the language and intent of the trust.
  • Establishing accounts for management of trust assets.
  • Collecting income and prudently managing  investment assets.
  • Receiving and conducting periodic inventories of trust assets.
  • Preparing and filing annual federal and state income tax returns.

This can be a lot to consider. Keep in mind a trustee does not have to be a family member or friend. A trustee can also be an independent professional, or even an institution like a bank or a trust company.  Choose wisely, whoever you select will have almost complete discretion about how to make payments and distributions from the trust on behalf of the disabled beneficiary. We know this article may raise more questions than it answers, please do not hesitate to contact us with your questions.

3 Things to Consider When Your Special Needs Child Turns 18

Having a special needs child has many challenges. One of the toughest challenges faced by many parents is knowing how to best care for their  child as they reach adulthood. There are many areas that need consideration when planning for the transition of a special needs child to adulthood. Let’s take a look at some of these areas.

Education

During childhood, the public education system provides for the bulk of the care, structure, and services that a special needs child requires. However, once they are out of public education, this support and service abruptly come to an end. If parents don’t plan for this transition, it can be difficult for the child and the family. That is why the Individuals with Disabilities Education Act (IDEA) requires that at age 14, the student’s Individualized Education Plan (IEP) contain a plan with steps that will be taken to help the student acquire skills that are necessary to transition from school to the workforce. Schools are required to monitor progress of the students as they acquire the specific skills. It is important for parents to understand their child’s rights and for parents of children with special needs to be advocates for their child as they turn 14 and enter this time of transition.

Employment

Special needs individuals if trained in skills specific to the workforce can find ways to have a job. For example, the local Walmart hired a young lady who has special needs to work as a cashier. The young lady while in school had an IEP. From the time the young lady was in elementary school, part of her IEP include life skills goals. These goals allowed her to learn necessary skills to get and keep a job as a cashier.

Beyond preparing your child early for the workforce, it is helpful to research companies that hire people with special needs and determine the types of skills they will need to succeed. Then, parents or other caregivers, should seek out ways to develop those necessary skills in their child. The key to employment is being prepared to help your child both during and after school. Be patient with the process. Sometimes it takes time for a special needs adult to get hired. Many people do not work because they are scared that they may lose benefits if they work.

Financial

Working can be a great way for special needs adults to earn some additional income. However, it is important to keep in mind that there are limits on the amount of money a special needs person can earn without affecting Social Security Insurance (SSI) and Social Security Disability Insurance (SSDI). Once a child reaches 18, these benefits are based on his or her own assets. Other ways to protect the assets of your special needs child is by creating a first or third-party trust. This way, your special needs child can draw benefits while also having assets.

If you are the parent of a special needs child, it is important to begin planning early for the future of your child. Don’t wait until your child is 18. The public education system can be a great resource but you will need to do some planning on your own. The good news is there are organizations that can help you and your child find the right employment opportunities to match their skills. An elder law attorney who specializes in adults with special needs can be very helpful in planning for the financial future of your child with special needs.

If you have any questions about something you have read or would like additional information, please feel free to contact us.

The ABLE Act and Helping Those with Special Needs

The Achieving a Better Life Experience (ABLE) Act was signed into law in December of 2014. The purpose of the Act was to provide individuals and families the ability to finance disability needs tax-free. The savings vehicle provided by the ABLE Act is similar to the 529 education savings plan. The ABLE Act allows families to save up to $100,000 in a special account to pay for disability-related care without risking eligibility for benefits such as Medicaid or Supplemental Security Income (SSI) because these assets aren’t counted towards the need-based asset thresholds for these programs. To be eligible for an ABLE account, the beneficiary must be someone who had an onset of a disability before age 26, and either receives Social Security Disability Insurance (SSDI) or files a disability certification under IRS rules. (The beneficiary doesn’t have to be under age 26 at the time the ABLE account is set up, but rather have had the disability onset before 26 years of age.)

The expenses which are exempted from taxation under an ABLE account include expenses for education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, and funeral and burial expenses. Also, states may choose to approve other expenses under their own regulations.

What happens if my account value exceeds $100,000?

 If the assets in an ABLE account exceed $100,000, then the beneficiary’s SSI benefit payments will be placed in suspension until the account value returns to below the $100,000 threshold. When the account value returns to under $100,000, the SSI benefit payments will automatically resume with no need for re-application.

The assets held in an ABLE account will not affect eligibility for Medicaid even if they increase above $100,000.

How does an ABLE account work?

 Any earnings made in the account from contributions will accumulate tax free at the federal level if the earnings are used to pay for disability-related expenses. This may also be true at the state level, depending on which state one lives in. If the funds are used for non-qualified expenses, then the earnings portion of the withdrawal will be taxed at one’s normal rate and subject to a 10% federal penalty. There are no federal tax breaks for contributions made into the account, only the earnings are tax-deferred. However, individual states have the option to provide tax incentives for contributions. In the event that the beneficiary of the account passes away, the state-run Medicaid agency may have the right to claim reimbursement up to the value of the Medicaid services provided to the beneficiary, depending upon state estate recovery laws.

Is the ABLE account program available in all states?

 Currently, the ABLE account program is available in 35 states and the District of Columbia. However, if one lives in a state that doesn’t offer an ABLE account, he or she can still take part in this program. Anyone may enroll in another state’s ABLE account program (even if one’s home state offers an ABLE program) as long as that other state stipulates they are accepting out-of-state resident applications.

 Are there limits on how much I can contribute to an ABLE account?

 Currently, the total annual contributions that are allowed into an ABLE account is $15,000, which includes contributions made by family and friends. This amount may be adjusted periodically to account for inflation. The total contribution limit for an ABLE account differs by state, but remember, if the value exceeds $100,000, SSI payments will be suspended.

 

The ABLE Act can be a life-changing savings vehicle for those with special needs and their families. If you would like to learn more, or have questions about anything you have read, please do not hesitate to contact our office.

 

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