March 21, 2019, is World Down Syndrome Day, followed by World Autism Awareness Day on April 2. According to the CDC, almost 17 percent of Colorado adults have some kind of disability and 7.7 percent of adults have cognitive impairments.
The bottom line is that many Coloradans have children, grandchildren, siblings, spouses, parents or grandparents with cognitive or developmental disabilities, physical disabilities, disabilities related to aging or other kinds of serious impairments. People with severe disabilities almost always need to access public benefits for housing, long-term care, medical care and more — and some of the federal or state programs have asset and income eligibility limits.
Important governmental benefits
In other words, if a disabled individual owns too much or makes too much, he or she may be (or become) ineligible for these vital benefits. The programs most often at stake are Supplemental Security Income or SSI, a monthly benefit available through the federal Social Security Act, and Medicaid, a joint federal-state program called Health First Colorado in our state.
Medicaid eligibility can be crucial because it often pays for long-term residential care like that received in a nursing home or group-home setting. Most individuals and families would quickly spend all their assets if they had to pay out of pocket for these services.
The asset limit for eligibility for most programs is very low (often $2,000), a level at which a person becomes essentially impoverished. Luckily, there is a legal vehicle called a special needs trust into which family members and friends may safely deposit money or designate in their wills to receive inheritance for the benefit of the disabled individual without endangering public-benefit eligibility.
A complex interaction of federal and state laws control and impact a special needs trust, so it must be very carefully thought out and drafted to both create a vehicle that can provide funds that benefit the beneficiary’s quality of life as well as preserve the lifelines that are some public benefits.
Anyone setting up a special needs trust must work with a lawyer to understand what money can safely go into the trust and what it can be spent on, so that benefits are preserved. Common expenditures may include:
- Medical or dental costs not otherwise covered by different program
- Technology like communication software, tablets, adaptive equipment and others if not otherwise covered
- Travel and leisure
- Education or training
It is imperative to enlist an experienced, knowledgeable attorney who has extensive experience with special needs trusts and keeps current on related legal developments. For example, the wording that describes powers and responsibilities of the trustee as well as distribution provisions must be carefully drafted in such a way that the trust proceeds are not considered available assets of the disabled beneficiary for purposes of public benefit eligibility.
The lawyers at & , LLC, in Denver have extensive experience with special needs trusts.