A Parent’s Situation Can Shift Child’s SSI to SSDI Benefits

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Mother and adult son with Down syndrome sitting on bench in garden.

Because of their disability, a person receiving Supplemental Security Income (SSI) may not have worked long enough to qualify for Social Security Disability Insurance (SSDI) benefits on their own work record. Therefore, once they meet the government’s strict physical or mental disability requirements and fall under SSI’s income and asset caps, the SSI recipient might assume that they will never obtain SSDI benefits in the future.

However, this is not always the case. In fact, many SSI recipients who became disabled prior to turning 22 years old may begin to receive SSDI benefits when one of their parents retires, becomes disabled, or passes away.

Can a Grown Child Collect Parents’ Social Security?

SSI recipients (and anyone else, for that matter) may qualify for the Disabled Adult Child (DAC) Program if they became disabled prior to turning 22 and if one of their parents paid into the Social Security program for the required number of quarters.

If the parent retires or becomes disabled, the child will receive 50 percent of the parent’s Social Security benefit. If the parent dies, the payment increases to 75 percent of the parent’s benefit. These payments trigger when the parent applies for Social Security, or someone informs the Social Security Administration (SSA) of the parent’s death and about the child with disabilities. Once informed, the SSA will begin making SSDI payments directly to the disabled adult child.

What to Watch Out For

If an SSI recipient suddenly begins receiving an SSDI payment, those additional funds could cause them to lose SSI if the amount they receive from their parent’s work record is greater than their current SSI benefit. Fortunately, SSI recipients in this situation do not lose access to Medicaid so long as the beneficiary is single or married to another person who is also receiving DAC benefits.

The receipt of additional SSDI funds does disqualify them from Medicaid, which would normally result from a loss of SSI. In addition, after the individual with SSI benefits receives two years of SSDI payments, they will also begin to receive Medicare benefits. As a result, although they might not receive their SSI cash award, they will have a larger SSDI payment and gain access to more insurance options – a win for the SSI recipient.

There is one other situation where an SSI recipient could acquire SSDI in the future. That is when they work for enough quarters while receiving SSI to eventually qualify for SSDI on their own work record. Although this situation is extremely rare, it does happen, so SSI recipients who are working limited hours should track their employment history carefully to find out when they are eligible for SSDI instead.

Your special needs planner can help you and your family navigate these complicated transitions. As always, you should consult your planner in advance of retirement or any other major life change to determine the effect of your actions on your loved one with disabilities. To get the help you need, contact Ruston, La. – based Special Needs Planning attorney Addison Goff. Visit www.GoffandGoffAttorneys.com or call 318-255-1760. 

Lifetime Money Management for Children With Disabilities

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Smiling child who uses wheelchair in front of drawing of two muscular arms on a blackboard.Children with disabilities present a unique challenge for parents who are looking to engage in estate planning. For one, you will want to optimize your estate to use, enhance, and enrich assets for your child. At the same time, maintaining their enrollment in public benefits programs is no doubt going to be essential.

To ensure you meet both of these objectives requires careful planning. An experienced attorney can prepare a special needs trust to accomplish these and other goals you may have for your child.

How a Special Needs Trust Works

Qualifying for means-tested assistance programs, such as Supplemental Security Income (SSI) or Medicaid, typically requires benefits recipients to meet strict financial criteria. A special needs trust can help an individual with disabilities meet these stringent rules. This is because the assets held in this type of trust are not directly available to the child.

A trustee of a special needs trust provides benefits to the child via the trust. Parents should select this trustee with great care. The trustee will act as the child’s money manager, ensuring proper supervision of their finances in the event that the child’s parents pass away.

A letter of intent can also be a powerful tool that helps to guide the trustee in making decisions that will best serve the child’s unique needs. 

Choosing a Trustee for a Special Needs Trust

In most cases, your child will benefit from you selecting a dependable individual to serve as their special needs trustee. You may wish to select a person who is not a family member and who would be independent in carrying out this role.

You have a range of options, including the following:

  • A parent, sibling, or another relative (which, again, can be risky)
  • An experienced estate planning attorney or special needs planning attorney
  • A financial institution or a trust company
  • A nonprofit organization, particularly one with special needs experience
  • Co-trustees, such as a trust company, acting in conjunction with a family member

Each of these options can have advantages and drawbacks. Keep close counsel with your estate planning attorney or financial advisor before you select a trustee.

When to Set Up Your Special Needs Trust

The creation of your special needs trust can happen while you are living or at the time of your death.

Parents often set up the trust while alive; this is known as a living trust (or inter vivos trust). A living trust boasts certain advantages, such as:

  • avoiding probate;
  • permitting other family members (for example, grandparents) to make trust contributions; and
  • giving a co-trustee the opportunity to experience what it’s like to administer the trust.

Alternatively, a last will and testament can incorporate creating the trust, known as a testamentary trust.

Types of Trusts

Note that whether a trust is revocable or irrevocable affects tax consequences.

Generally, a revocable trust can be changed at any time and so is used to maintain maximum control over the trust. With this type of trust, income tax considerations are not a concern.

Irrevocable trusts, which cannot be changed once they are created, are often used to minimize income tax consequences, particularly if the trust funds exceed $1 million dollars. In this instance, both federal estate and gift taxes may apply to the trust.

A special needs trust is usually irrevocable and may be a first-party or third-party trust, depending on how you choose to fund it. Relinquishing control of the trust to a trustee protects your child’s government benefits. which can be vital to maintaining their health and living arrangements.

Money in the trust will not be counted toward income or asset limits by Medicaid or Social Security programs. This ensures that your child will continue to qualify for the support they need while also being able to receive gifts from family members that may further enhance their quality of life.

Why Special Needs Trusts and Estate Planning Are Important

Verbally telling your family how to care for your child is insufficient. In the absence of a will or trust, the state in which you live may determine the outcomes of your estate’s distribution. This situation is not a viable option for a child with special needs or any of your children.

Receiving proper legal guidance on the appropriate trusts to use in your estate plan is crucial to your child’s future. Do not attempt to craft these legal documents on your own, use existing forms, or copy an online internet template. Each child with special needs requires careful considerations unique to them and the challenges they face.

With so much at stake, be sure to seek out the expertise of your attorney. They can tailor your estate plan to best suit your wishes as well as the specific needs of your child. Protecting public benefits such as Supplemental Security Income (SSI) and Medicaid will help safeguard your child’s well-being into the future. Establishing a special needs trust through the estate planning process is a key way to achieve this goal.  .

To get the help you need, contact Ruston, La. – based Special Needs Planning attorney Addison Goff. Visit www.GoffandGoffAttorneys.com or call 318-255-1760. 

 

Planning for Children and Adult Children With Special Needs

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Close-up of smiling young Latina woman with Down syndrome.Individuals with special needs may have a developmental disorder, such as autism, ADHD, or Asperger’s syndrome. They may have an intellectual disability such as Down syndrome. Or, perhaps they have a learning disability such as dyslexia or physical impairments that affect their vision or hearing. People with other serious or chronic health conditions, such as cystic fibrosis or epilepsy, may count as special needs.

The US government combines this group into the overall class of disability. Current data estimates the US population of people with disabilities comprises more than 42 million individuals.

Making plans that address your child’s experience while living with physical and cognitive impairments requires careful thought and planning. When looking toward their future, consider your child’s ability to make decisions and find the resources they will need. If you can provide for them financially, this will allow them to live on their own to the fullest extent possible.

At the same time, using specific legal arrangements to protect their best interests is crucial. There will likely come a time when you are no longer around or able to help. The foundation for continued care you set today will ensure your child has the best possible chance for a successful future.

Special Needs Planning

Achieving your planning goals begins with understanding the financial implications of your loved one’s situation. The top priority is typically providing financial security for your child with special needs. Much of this security will come from government services like Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medicaid.

A special needs trust or a life insurance policy can further enhance your child’s financial future. Work closely with your special needs planning attorney to incorporate financial resources or gifts into your special needs plan. They can help ensure that your child remains eligible for invaluable government programs. In addition, they are familiar with maintaining all possible avenues of support through legal techniques.

Creating a Support Team

Beyond securing their financial future, as a family, you need to identify your child’s support team. First, be sure to select a guardian to make medical or life decisions for your adult child if they are unable to do so. Naming a backup guardian is also common practice.

If there is a special needs trust in place, you must appoint a trustee to oversee the trust. Having a trustee different from the named guardian is an excellent checks and balances system. If possible, involve your special needs child in the discussions and planning process. Individuals living with a disability want a say in who they’d prefer to have involved (or not) in their lives.

Parents may struggle to trust others with the care of their child with special needs as they age. It can be difficult for them to believe that someone else is capable of providing the same level of care. Each family must work out issues and make compromises, keeping the child’s best interest in focus.

Professional personal care assistance can relieve the principal care provider, usually the guardian, and give families extra flexibility. Some care options to consider include:

  • Family members – Many individuals with special needs choose to remain with relatives. Typically, the family knows the child’s routines and preferences best. However, this may leave family members serving as unpaid caregivers, putting their earning potential and future at risk. Sharing family responsibility and rotating caregiving may alleviate this problem, yet it may not be ideal for the person with special needs.
  • Personal care professionals – Known as PCAs, these caregivers are the main method of non-family care. Duties include organizational or housekeeping tasks, bathing, dressing, ventilator or catheter care, and transportation. Although you can hire a PCA through an agency, many families opt to hire and train individuals directly. In either case, proper vetting is a must.
  • Community-based homes and supported living arrangements – Some adults with special needs are capable of living in group homes. Here, they can live with independence and some support. Care providers who live or work in these settings offer services ranging from medication assistance to decision-making. This living arrangement is typically communal with shared activities, including meals and social groups.
  • Independent living arrangements – Many adults with special needs can live on their own with a PCA’s support as needed. Some individuals may only require a few hours of PCA care daily to help with morning routines or mealtimes. Others have several PCAs providing 24-hour care in rotation. Sometimes there is an arrangement with a housemate or roommate to provide backup support in exchange for a break on rent.
  • Assistive technology (AT) – The digital age has given rise to many assistive devices providing greater options for independence. AT allows people with disabilities to control their home environment, take their baseline medical readings, or access the internet.
  • Day programs – Young adults with special needs may attend public schools until they turn 21. As these young adults transition to adulthood, some day programs provide similar continued education and structure. Such services and programs can help in enhancing their life skills while maintaining social bonds with a community of their peers.
  • Long-term care facilities – In recent decades, there has been a movement away from care in institutional settings. However, a residential facility may prove to be the best option for certain situations. For instance, there may be limited access to or long waiting lists for community care or other types of support.

Drafting a Letter of Intent

Create a letter of intent (LOI) to help add another layer of protection for your child into the future. An LOI can provide a general overview of your child’s life. It might address family history, your child’s daily schedule, medical care, education, or public benefits on which they rely. You may also consider including information on the following:

  • Employment hopes
  • Residential social and religious environments
  • Behavior management
  • Foods (including any allergies)
  • Hopes for their future

You can also explain expectations for your child’s final arrangements for funeral services and burial.

Some options for your child’s future are only available with additional private funding. However, with the right planning, all children and adult children with special needs can qualify for appropriate life care.

Discuss care options with your special needs attorney as your first step in creating the best plan possible for your child. 

To get the help you need, contact Ruston, La. – based Special Needs Planning attorney Addison Goff. Visit www.GoffandGoffAttorneys.com or call 318-255-1760. 

Choosing Trustees for Special Needs Trusts: Four Things to Consider

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View of man's shoes on floor with arrows pointing in three different directions in front of him.Choosing the right person to serve as trustee of a special needs trust (SNT) is a key task when creating such a trust. It may also prove to be one of the most challenging. Trustees are responsible for the following:

  • managing the day-to-day operations of the SNT,
  • making distributions to the trust’s beneficiary,
  • investing the trust’s assets, and
  • paying the trust’s bills.

This, in turn, helps ensure that the special needs trust’s beneficiary remain eligible for public benefits programs.

The law is not particularly strict about who may serve as trustee. The trustee must be over 18 years of age and capable of managing their own affairs. They can be the child’s parent or other relative or a trusted friend. Or they can be a professional such as a lawyer, accountant, trust company, bank, or private professional fiduciary.

Here are five important questions to ask yourself when deciding on who should serve as a trustee for a special needs trust:

1. Is the potential trustee knowledgeable about public benefit programs?

It can prove crucial for a trustee of a special needs trust to be familiar with the different types of public benefit programs. They will be responsible for ensuring that the special needs trust beneficiary remains eligible for their public benefits.

Many government benefits like Medicaid, Supplemental Security Income (SSI), and Section 8 housing have complicated rules governing SNTs. The trustee of a special needs trust must know these rules well. Or they at least need to work closely with a special needs planner who can explain the consequences of their actions as trustee.

2. Does the trustee have time to carry out their duties?

Serving as the trustee of an active special needs trust can seem like a full-time job. Depending on the needs of the beneficiary, the trustee could indeed spend a good deal of time on any number of tasks. These may include the following:

  • paying bills,
  • monitoring government benefits,
  • helping to secure housing,
  • paying for medical care, and
  • serving as a link between the beneficiary and a variety of service providers.

Sometimes, trustees find that they can’t perform all the necessary tasks in a timely manner. Or they feel they’re sacrificing their family life or other professional obligations to fulfill their duties as a trustee. If this is the case, it may be time to look for a professional trustee.

3. Should you consider a professional trustee?

Professional trustees can be an attorney, accountant, trust company, investment firm, bank, or private professional fiduciary. With a professional serving as a trustee, you can rely on the expertise of that individual or institution. They will have a deep understanding of public benefits programs, investments, money management, and tax planning. Another advantage is that you may stand to gain some emotional distance.

Sometimes, a beneficiary may have certain demands for trust distributions that can cause significant problems for family members. Again, having a professional trustee in place can help you avoid these kinds of family complications.

4. How comfortable are you giving control over the trust to an outsider?

Perhaps you feel uncomfortable with the idea of an outsider managing your loved one’s special needs trust. Keep in mind that it is possible to appoint a family member and an independent trustee as co-trustees. This way, you can rest assured that there is one trustee who is familiar with the beneficiary and has their best interests at heart. At the same time, the co-trustee can help carry out the tasks necessary to meet the public benefit programs’ requirements.

Another option is to appoint a trust protector. A trust protector has the powers to review accounts and to hire and fire trustees. In addition, a trust advisor can help instruct the trustee on the needs of the beneficiary.

Consult With Your Special Needs Planning Attorney

Make sure that whomever you choose as an SNT trustee is financially savvy, well-organized, and, most important, ethical. Work with your special needs planner to make the best choice. To help with your Special Needs Planning, contact Elder Law and Estate Planning Attorney Add Goff of Ruston, La. at 318-255-1760 or info@GoffandGoffAttorneys.com.

What Is the Social Security Disability 5-Year Rule?

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Young woman pushes young man with a disability who uses wheelchair across living room.Social Security Disability Insurance (SSDI) provides financial assistance to workers who become disabled and their families. The Center on Budget and Policy Priorities reports that 7.4 million Americans received Social Security disability benefits in 2023.

Unlike Supplemental Security Income (SSI), which supports people with disabilities or of advanced age who have limited means regardless of work history, SSDI is an earned benefit. Before becoming disabled, the worker must have paid into the Social Security program through taxes to be eligible for benefits.

When you apply or reapply for SSDI benefits, there are two five-year rules to remember: One concerns the work credit requirement. The other involves reapplying for benefits.

Qualifying for Social Security Disability Insurance

The eligibility criteria for SSDI involve disability, income, and work history.

  • Your disability must meet the Social Security Administration’s strict standards.
  • Your income must be below the substantial gainful activity (SGA) amount. For 2024, the SGA is $1,550 per month for people with disabilities other than blindness (For blind people, it is $2,590 per month.)
  • You must also have earned sufficient work credits and worked recently enough. You must have earned enough work credits before you became disabled relative to your age.

The Five-Year Rule for Work Credits

The five-year rule for work credits helps people aged 31 and older determine whether they have enough credits to qualify for SSDI.

Depending on your income, you can earn up to four credits a year. In 2024, workers earn one Social Security and Medicare credit for $1,730 in covered earnings.

Under the five-year rule, people 31 and older must have worked at least five out of the last 10 years to be eligible for SSDI.

You may work for less than an entire year and still earn the maximum credits. As long as you earned four credits through your income, it does not matter if you earned that income through seasonal work or worked all year. Also, high earners may earn all four credits after only a month of work.

So, per the five-year rule, individuals aged 31 and older must have earned at least the maximum work credits for five out of the past 10 years to be eligible for disability benefits. During that time, they must have accumulated at least 20 credits to qualify.

If you are 30 or under, you’ll need to use a different test to determine whether you have enough work credits to receive Social Security disability benefits. The Social Security Administration determines your eligibility for benefits based on your age, and there are different rules for different age groups.

  • Those under age 24 need at least six credits earned in the three years before the onset of the disability.
  • People between 24 and 31 are eligible if they worked half the time between the age of 21 and when they became disabled.For example, a person who became disabled at age 27 must have worked at least three years, earning 12 credits, in the past six years.
  • Individuals 31 or older must have earned at least 20 credits in the last 10 years before the disability. This is known as the five-year rule.

The Five-Year Exception for Reinstating Benefits

In addition to the rule that helps people aged 31 and older find out whether they have enough work credits, a second five-year rule applies to past SSDI recipients seeking to reapply.

Per federal regulations, you must have a disability for five months before qualifying for benefits. But, this regulation provides an exception. There is no waiting period if you were previously entitled to disability benefits or had a period of disability within five years of the month you became disabled again.

Because of this five-year rule, you do not have to wait five months to receive benefits. However, the exception does not apply if a drug or alcohol addiction contributed to your disability.

Speak With an Attorney

If you seek disability benefits, an attorney can prove indispensable. Special needs planning Add Goff can explain the rules to you and assiste with estate planning to help you determine whether you could qualify for benefits.

ABLE Accounts in 2024: Save Up to $18,000 Annually

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Young man using wheelchair holds rail on ramp on sidewalk.For nearly a decade, people with disabilities have had the option to accumulate savings in a special tax-free account – without risking their means-tested public benefits. In 2024, the annual limit on how much money one can deposit into these savings vehicles, known as ABLE accounts, will rise, allowing individuals to add up to $18,000 per year.

What Is an ABLE Account?

Many people across the disability community rely on such government assistance as Medicaid, Supplemental Nutrition Assistance Program (SNAP) benefits, or Supplemental Security Income (SSI). Yet having too many assets to their name can disqualify them from receiving these often critical benefits. For example, in most states, the resource limit to qualify for Medicaid is just $2,000. In 2014, Congress signed the Achieving a Better Life Experience (ABLE) Act into law to help address this issue.

Individuals with an ABLE account can save up to a total of $100,000, tax-free, while remaining eligible for public assistance programs. Family members, friends, and others can make contributions to the account, too. The disabled person can then use these funds to help maintain their independence by spending them on disability-related expenses, including assistive technologies, education, transportation needs, vacations, legal fees, and health care.

Unlike a special needs trust (SNT), an ABLE account can be opened by the individual with the disability. This offers them considerably more control over the account funds compared with an SNT.

Starting in 2024, the annual limit on contributions to ABLE accounts will be $18,000, up from $17,000 in 2023. Through the end of 2025, ABLE account owners who work can contribute their employment income to these savings vehicles even beyond the per-year deposit limit.

The idea for these accounts derived from the concept of a 529 college savings plan. Similar to a 529 plan, funds in an ABLE account grow tax-deferred over time. In addition, each state administers its own ABLE account program.

To qualify, you must meet the Social Security Administration’s strict definition of “disabled.” You also must have incurred your disability before age 26. (Note that the age cutoff will shift to age 46 come 2026. According to estimates, this age adjustment will result in roughly 6 million more individuals becoming eligible to open these types of savings accounts.)

Why Open an ABLE Account?

People with disabilities are among those most at risk for financial disaster. According to research, just 10 percent of people of working age who are living with a disability are financially healthy.

ABLE Accounts, or 529A accounts, can serve as a form of future financial support for these individuals. Yet the vast majority of those who could benefit from these accounts remain unaware of them. As of 2022, 8 million people were eligible for this type of account, yet a mere 120,000 had one in place.

Get Support With ABLE Accounts

To learn more about setting up this type of savings account, consult your special needs planning attorney.

How Gift Cards Could Affect SSI Benefits

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Joyful young brunette woman girl in yellow sweater excitedly holds up a gift voucher.Special events like holidays and birthdays often include gift-giving. Gift cards are a convenient and common choice. According to Capital One Shopping, 54 percent of United States consumers buy gift cards as holiday gifts.

Supplemental Security Income Benefits

Before purchasing a gift card for someone who receives Supplemental Security Income (SSI), be sure to understand how receiving a gift card could affect the benefits on which they rely.

SSI is a needs-based program for people with limited income and resources who have a disability, are blind, or are 65 or older. To remain eligible for SSI benefits, your loved one must have income and resources below specific thresholds.

These limits, which can vary by state, can make giving gift cards to an SSI recipient challenging. The Social Security Administration (SSA), which runs the SSI program, may consider certain gift certificates income for the month received.

The SSA requires SSI recipients to report changes in income and resources. Giving a gift card that increases your loved one’s income could result in the SSA reducing or even eliminating their benefit altogether, depending on the amount you have given them. According to the SSA, an increase in their unearned income will affect the payment the beneficiary receives two months later.

Gift Cards as Unearned Income

The SSA considers gift cards as unearned income in the following circumstances:

  • It allows the beneficiary to buy food or shelter; or
  • the beneficiary could resell it

Since SSI benefits help a recipient cover their costs for food and shelter, the SSA considers income that could go toward these essentials as a reason to reduce or eliminate the need for SSI benefits. Many department stores and online sellers like Amazon offer food items such that their gift cards could affect a person’s SSI benefits. And, unless the terms of a gift card explicitly prohibit resale, the SSA assumes that the gift card has resale value.

The eligibility requirements for SSI limit the amount of earned and unearned income an individual may receive. The administration considers gift cards unearned income. In 2023, an individual can receive up to $934 per month in unearned income, per the SSA.

Imagine an SSI recipient with $800 in unearned income gets a $200 Visa gift card as a holiday present. The individual has the ability to use the gift card to purchase food and shelter items. With the gift card, their total monthly income will equal $1,000. Because this exceeds the income limit of $934, the individual no longer meets the SSA’s requirements.

SSI benefits are dependent on income. Even if the gift card does not put the SSI recipient over the unearned income limit, it could result in a reduction of their benefits. When an individual’s unearned income increases, SSI benefits reduce by about $1 for every $1 received, per the SSA. So, a $200 gift card would in turn reduce the recipient’s monthly benefit by $200.

If a single adult receives $914 in benefits each month, they could expect a reduced payment of $714.

Gift Cards as Resources

In addition to affecting income, gift cards also count as available resources. An SSI recipient can have up to $2,000 in resources ($3,000 for couples). When a beneficiary receives a gift card but does not spend it, it becomes a countable resource, which could disqualify them from benefits.

Suppose you give your loved one who receives SSI a gift card for $200, and they have $1,900 in resources. They would now have a total of $2,100 in resources. The $200 gift card could put them over the resource limit for a single person by $100.

Gift Cards Not Considered Income

While most gift cards allow the recipient to make food and shelter purchases or potentially resell the gift card, specific gift cards may not. These types of gift cards will not count as income or count toward available and countable resources for the recipient. For instance, a $200 gift card to an office supply store with a legally enforceable prohibition on resale would not count as income or resources of the recipient.

Consult With Your Special Needs Planning Attorney

While you have good intentions, purchasing a gift card for an individual who receives SSI can result in potential problems with their benefits. Undoubtedly, you want to support a loved one who has limited income without jeopardizing their benefits, Contact your special needs planning attorney for guidance today.

Support Your Child With Disabilities — and Still Qualify for Medicaid

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Child with disability playing guitar with parent.If you have a child with a disability, providing for them into the future will likely stand among your top priorities. However, if you also wish to apply for Medicaid to cover your own long-term care expenses, first consider establishing a special needs trust (SNT) for your child. This will allow you to transfer assets to support them while remaining eligible for Medicaid yourself.

The rules for participating in Medicaid, a federally funded program managed by the individual states, are stringent and complex. Applicants must demonstrate that their income and assets are below the limits set by their state before Medicaid will fund their long-term care. Anyone with more than $2,000 (in most states) in “countable assets” (generally, anything beyond their home, one automobile, and personal belongings) will not qualify. At the same time, applicants can’t just give their money away and expect immediate support from the program.

Congress does not want people to move into a nursing home on Monday, give all their money to their beneficiaries on Tuesday, and be eligible for Medicaid on Wednesday. To avoid this situation, any Medicaid applicant who has transferred their assets recently — in most states, “recently” means the past 60 months — will be ineligible for funding for a certain period of time. The duration of these penalty periods is determined by dividing the amount transferred by what Medicaid determines to be the average private-pay cost of a nursing home in that state.

Special Needs Trusts to the Rescue

The good news: Certain asset transfers are exempt from such penalties. Even after entering a nursing home, Medicaid applicants may transfer any asset to the following individuals without having to wait out a period of Medicaid ineligibility:

  • their spouse
  • a trust for the sole benefit of a child (of any age) who is blind or permanently disabled as defined by the IRS
  • a trust for the sole benefit of anyone under age 65 who is permanently disabled

In other words, there is a way to set money aside for someone with permanent disabilities and still qualify for Medicaid for your own long-term care. This is possible through an SNT, which is specifically geared to support the beneficiary with disabilities, under the management of a trustee, throughout their lifetime. (In this case, the SNT would be a “third-party SNT” because the funds come from someone other than the person with disabilities. Note that the gift can be made to a third-party or first-party SNT, depending on the state in which you live.)

An SNT also can ensure that the individual with disabilities continues to receive any public benefits already available to them through government programs such as Medicaid and Supplemental Security Income (SSI). That is, if you were to transfer your assets directly to the person with disabilities and their resulting “countable assets” then exceeded a program’s  threshold (which is $2,000 for SSI), you may inadvertently have made them ineligible for those government programs.

Because each state is different when it comes to Medicaid, and because laws and cost projections are constantly changing, be sure to work closely with a special needs planner in your home state so that you can provide for your own care, and that of your loved one with disabilities, in the best possible way. For more information, check in with your special needs planner.  If you have a special needs child and want to provide the for him or her in the safest way, please contact Special Needs Planning Attorney Add Goff at 318-255-1760 or info@GoffandGoffAttorneys.com. 

Housing Considerations for Your Child With Special Needs

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Mother embracing her child with Down Syndrome on sofa.Affordable, safe housing is one of the most crucial aspects of a person’s life, especially if that person has a disability.

Parents and guardians must plan for this as early as possible to make sure their loved one has a secure and appropriate living situation long after they either become unable to provide care or pass away.

Here are some general considerations to keep in mind when formulating a plan. The plan that works best for your family should be affordable in the long term and best suited to your loved one’s disability.

Housing Options

You may be caring for your special needs child at home, where there are no additional costs for residency, and the setting is safe and familiar. But in most cases, this is not a permanent solution. Inevitably, as parents and guardians age or develop health problems, they will not be able to provide the supervision and care needed. Bringing in around-the-clock home health care may not be affordable.

For people with intellectual or developmental disabilities (IDD), there is an increasing movement away from private or state-run institutions and toward community care. This encompasses a great number of programs, from treatment provided in group homes to interaction with a social worker to job training and other vocational training centers.

One of the programs on the cutting edge of community mental health is called “supportive housing,” and it incorporates not only housing, but social services and medical care as well.

Your city or state may have supportive housing programs. Providers of supportive housing are typically non-profit organizations that contract with federal, state, or tribal governments to provide the housing and services that were formerly provided in institutional settings.

The Arc, a nonprofit advocacy program for adults with IDD, offers an online planning tool that provide insight on a host of issues, including finding accommodation, getting a job, and securing special services.

Financial Considerations

It is vitally important to make sure there will always be sufficient funds to pay for your loved one’s housing, and to set money aside without compromising their access to government benefits, if applicable. One strategy is to set up a special needs trust (SNT). Regulations about using SNTs to pay for section-8 housing through government vouchers are especially complicated. Learn more about these regulations.

Another crucial planning tool is life insurance for the parents or guardians, if they qualify. Even term insurance will provide protection and immediate cash in the event that a parent dies unexpectedly. Other assets, such as the proceeds from the sale of the family home, can be set aside in an SNT to pay for a loved one’s care and support into the future.

Do It Right — and Don’t Wait

“The best plan is to start early: Apply for Medicaid, find a financial advisor, establish a good credit rating for the person with disability, and then talk to their care coordinators or housing navigators about detailed options,” say Musa Klebnikov and Michele Lawton of Special Needs Advisors LLC, an agency that helps families place their loved ones in living situations. “Everyone has different needs and support systems; therefore, each family needs a different solution.”

Failing to put a plan in place can lead to trauma and stress for the family if something unexpected happens in the meantime. Avoid scrambling to find the best solution for your loved one’s housing. Start planning early and with the right professionals. Find a special needs attorney in your area.

Is Bipolar Disorder a Disability According to the SSA?

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Woman sits on couch looking depressed while someone talks to her.According to the National Institute of Mental Health (NIMH), approximately 4.4 percent of adults experience bipolar disorder during their lives.

Individuals with certain disabilities may be able to secure disability benefits through the Social Security Administration (SSA). If you or a loved one have bipolar disorder, you may wonder whether the SSA considers bipolar disorder a disability.

Depending on the severity of the illness, the SSA may consider mental health illnesses such as bipolar disorder a qualifying disability. The law firm Atticus reports that , in 2020,13 percent of people receiving disability benefits qualified based on mental health issues. Five percent of these individuals had bipolar disorder or a similar condition.

What Is Bipolar Disorder?

Formerly known as manic depressive disorder, bipolar disorder involves extreme mood swings. Highs can entail various levels of mania, and lows can bring depressive episodes.

When someone experiences mania, they may feel euphoric, creative, and talkative. Highly energetic, they may have trouble sleeping and may also show poor decision-making ability.

During the lows of the disorder, individuals may feel sad or hopeless, lose interest in things they typically enjoy, and have trouble concentrating and completing tasks.

Types of Bipolar Disorder

There are four different types of bipolar, Healthline reports:

  • Bipolar 1 – Mania is more intense with Bipolar 1, while depression is less severe. Some patients may not experience depression.
  • Bipolar 2 – Individuals with Bipolar 2 experience a less severe form of mania and episodes of depression.
  • Cyclothymic disorder – The ups and downs of this form of bipolar disorder are less intense than in Bipolar 1 or 2.
  • Other specified and unspecified bipolar disorders – Individuals with these disorders may still experience highs and lows in mood.

Popular culture often depicts those with bipolar disorder as highly creative artists. Yet this type of mental illness can nonetheless be devastating.

According to the NIMH, those with bipolar disorder experience the highest levels of severe impairment among people with mood disorders. Having bipolar disorder can make it difficult for someone to regulate their mood. Fluctuating moods can complicate relationships, making keeping long-term relationships difficult. Changes in productivity and interest in working can also make maintaining employment challenging.

The National Alliance on Mental Health states that the average age of onset for bipolar disorder is 25. This illness can also occur in adolescents and even children as well.

Treatment of Bipolar Disorder

Treatment options may consist of a combination of medication and cognitive behavioral therapy. Health care providers often also recommend learning strategies for self-managing bipolar disorder. These could include keeping to a stable routine and learning how to recognize one’s triggers. Maintaining a strong network of loved ones for support and living healthfully can also prove helpful.

The Substance Abuse and Mental Health Services Administration offers a free hotline available 24-7 for those coping with mental health disorders such as bipolar disorder. Call 1-800-662-HELP to obtain referrals to treatment centers and support groups near you. This national service is confidential and available as in English as well as Spanish.

Is Bipolar a Disability Under the SSA’s Definition?

As having bipolar disorder can cause day-to-day challenges, individuals with this illness may qualify for disability benefits.

Eligible individuals who meet the SSA’s definition of disability may receive one, or both, of the following types of public benefits:

  • Social Security Disability Insurance (SSDI). SSDI provides monetary assistance to workers who can no longer participate in the workforce because of a disability. They must have a work history and had to have paid into Social Security to qualify for these benefits. (Individuals who became disabled before age 22 may be able to qualify for SSDI based on a parent’s work record.)
  • Supplemental Security Income (SSI). SSI gives financial support to those with very limited income and resources, including children and adults with disabilities.

The SSA administers both programs, and the medical requirements are the same. However, these programs do differ in three important ways. They do not have the same financial requirements, offer access to the same health benefits, or provide the same monthly payments.

Disability Definition

To receive SSI or SSDI for a disability, you first have to meet the SSA’s definition of disability. You must have a medically determinable physical or mental impairment that prevents you from engaging in any substantial gainful activity. (The SSA considers “substantial” activity any type of work that requires significant physical or mental activity, or both. “Gainful” activity is work generally performed for pay.)

Your disability must also:

  • be terminal,
  • have lasted for at least a year, or
  • be likely to last at least a year.

Since the illness must be severe enough to prevent you from working, not all with bipolar disorder can obtain benefits.

Applying for Disability Benefits

To receive benefits, you must prove that your bipolar disorder qualifies as a disability. This entails the following:

  • Submitting information about health care providers, doctors, hospitals, and clinics
  • Providing your job history

For your application to succeed, it should establish that your bipolar disorder severely limits your mental functioning and ability to work. It must also show that your illness is long-term. Even though the Americans With Disabilities Act recognizes bipolar disorder as a disability, the SSA may not.

Contact our Ruston, LA office by calling us at (318) 255-1760 today and schedule an appointment to discuss how we can help you with your planning.