The Voice is the e-mail newsletter of The Special Needs Alliance. This installment was written by Special Needs Alliance member Richard Sayre, of Spokane, Washington. Mr. Sayre is a Certified Elder Law Attorney by the National Elder Law Foundation, and his practice emphasizes planning for disability for both elders and individuals with special needs. He is an Adjunct Professor of Law at Gonzaga University School of Law, and has served as a Trustee on the Elder Law Section of the Washington State Bar Association, and on the Washington State Professional Guardian Certification Board, as well as other professional organizations working to improve quality of life and protection for those with special needs.

March 2009 - Vol. 3, Issue 2

There is a serious but frequently overlooked problem parents face who have a child with special needs. Perhaps the child has lived at home with his or her parents since birth. But as the caretaker parent ages, the child’s future looms as an ever-increasing worry.

What if the parent develops a chronic disabling condition? What if one day =96 and perhaps without warning =96 the parent is simply not available, or not able, to continue providing care? When such unplanned-for events occur, they can be terrifying for the parents and children involved. Fortunately, qualified, creative and caring legal assistance can help you find pathways through this dark and tangled wood.

Past issues of The Voice have discussed the benefits of special needs trusts for family members with a disability. These trusts can be included in a Will (called “testamentary” trusts, because they are contained within a Last Will and Testament), or designed as stand-alone “living” trusts, which are created while the person setting up the trust is alive. (More information about special needs trusts is available at the Special Needs Alliance website.)

Both types of trust are useful for different situations, and the choice of which to establish should be made in consultation with a lawyer experienced in this area. Because every situation is different, so is every solution.

The primary focus of a special needs trusts is to enable a person with disabilities to continue qualifying for Medicaid, Supplemental Security Income (SSI) and other essential asset-tested benefits, while still benefiting from an inheritance following the death of a parent or loved one. While an experienced special needs attorney would be skilled in dealing with circumstances where a person with disabilities inherits property in the absence of a special needs trust, the pre-need creation and use of such a trust is vastly superior to emergency planning.

This issue of The Voice focuses on the situation in which the life long caregiver of a person with disabilities becomes disabled and needs help herself. What can be done to provide for the safety of the disabled caregiver parent, as well as the person with disabilities who has relied on that parent for most of his or her adult life?

Consider Emma and her daughter, Clarice

Emma had one daughter, Clarice, who was born with developmental disabilities and became difficult to manage due to emotional outbursts as she grew older. During her daughter’s early years, Emma and her husband worked hard to help Clarice overcome her emotional issues with some success. Eventually, Clarice was comfortable with her parents in her home. However, efforts to bring in others to provide care for Clarice when her parents were away proved futile, so wherever Emma and her husband went, Clarice went too.

When Clarice was 12, her father died, leaving the entire burden of raising her on Emma. Emma went to work, and set up a system of trusted caregivers to watch over Clarice during those difficult years. Clarice and Emma continued to live together in Emma’s home until Emma was in her 80’s. They had an extremely close and trusting relationship, and only Emma could help Clarice through times of stress. As Emma became less able to care for her daughter, she was able to obtain Medicaid assistance to help her care for Clarice at home. With Emma’s help, Clarice came to accept caregiver assistance.

When Emma was 82, she noticed that she was forgetting appointments. She visited with her physician, who determined that she had a form of dementia. Emma was devastated. Her concern was not for herself, but for Clarice, who depended upon her for everything. As Emma’s dementia worsened, Clarice began caring for her mother to the extent she could. Emma had limited resources, and as her care needs increased, her assets began to diminish. She began to reach out for help, very concerned that her daughter would not survive without her.

Fortunately, family members became involved and sought qualified legal counsel. It was determined that Emma would soon need long term care placement in a skilled nursing home. It was also determined that without Emma, Clarice (who was now in her early 60’s) would need that level of care as well. The dilemma was that no facility was willing to accept Clarice due to her emotional instability and limited assets.

The solution was a special needs trust for Clarice. Emma was able to transfer her assets into the trust, naming a trusted and caring family member as trustee to manage the funds for Clarice. Because gifts to a special needs trust for her disabled child are not treated as a Medicaid disqualifying “divestment” of the parent, Emma was able to qualify for Medicaid-supported care in a local nursing home when the trust was created and funded.

Clarice’s special needs trust did not “count” as her own asset, and thus Clarice’s Medicaid and income benefits were not affected by her mother’s decision to use a special needs trust for her daughter. The nursing home agreed to take both Emma and Clarice and place them in the same room. Emma could be with her daughter and help her adjust to life in her new home, and Clarice could be with her mother. The facility accepted both of them because Emma could still help Clarice with her emotional outbursts and because both were qualified for Medicaid and could share a room.

Emma lived for another six years, and when she finally passed away, Clarice was fully adjusted to life in her new home. She resides there today and is loved by the staff. The trustee of Clarice’s trust pays the extra charge for a private room for Clarice, and Clarice is happy and well adjusted. Because Medicaid pays the bulk of Clarice’s care expenses, funds remain in the trust to secure her future for many years to come. Emma’s goal of protecting her daughter was met, and Clarice remains in a comfortable and secure setting, thanks to the careful planning of her mother and concerned family members with the assistance of a special needs lawyer.

Please note that in January 2009, the Social Security Administration revised its policy regulations that affect administration and funding of special needs trusts. In choosing a special needs lawyer, be sure to select one who is familiar with the latest version of these important regulations

About this Article: We hope you find this article informative, but it is not legal advice. You should consult your own attorney, who can review your specific situation and account for variations in state law and local practices. Laws and regulations are constantly changing, so the longer it has been since an article was written, the greater the likelihood that the article might be out of date. SNA members focus on this complex, evolving area of law. To locate a member in your state, visit Find an Attorney.

 Requirements for Reproducing this Article: The above article may be reprinted only if it appears unmodified, including both the author description above the title and the “About this Article” paragraph immediately following the article, accompanied by the following statement: “Reprinted with permission of the Special Needs Alliance –” The article may not be reproduced online. Instead, references to it should link to it on the SNA website.