Special Needs Trusts: Ensuring a Brighter Future

Special needs trusts, also known as supplemental needs trusts, play a vital role in securing the financial well-being of individuals with disabilities. These trusts are a powerful tool that allows the family of a disabled individual or the individual themselves to set aside funds while still maintaining eligibility for essential public benefits like Medicaid and Social Security. The primary objective of special needs trusts is to enhance the quality of life for the beneficiary without jeopardizing their access to crucial assistance programs. Michael R. Goldstein, Esquire, LLC in Pikesville, MD, can be reached at 410-449-2015.

Preserving Eligibility for Public Benefits

Many government assistance programs are "means-tested," which means that eligibility depends on the individual's income and assets. If these resources exceed a certain threshold, the individual may no longer qualify for vital public support. Special needs trusts are designed to address this challenge. They allow for the creation of a financial safety net while ensuring that the beneficiary can continue to access essential benefits.

How Special Needs Trusts Work

Special needs trusts are permanent and irrevocable. They are managed by a trustee, who is responsible for overseeing the funds and disbursing them in accordance with the trust's terms. Importantly, the beneficiary does not receive the trust assets directly. Instead, the trustee uses the funds to cover specific expenses that enhance the beneficiary's quality of life. These allowable expenses often include medical and dental care, educational support, assistive technology, transportation, and more.

Enhancing Quality of Life

By supplementing public benefits with funds from the special needs trust, individuals with disabilities can enjoy a higher standard of living. This may involve access to better medical care, educational opportunities, recreational activities, and overall improved well-being. Special needs trusts aim to empower individuals to lead fulfilling lives while mitigating financial constraints.

Planning for the Future

Creating a special needs trust requires careful consideration and legal expertise. If you have a loved one with a disability, or if you are an individual with special needs, it's essential to explore the possibilities and opportunities that special needs trusts can provide. These trusts offer peace of mind for both beneficiaries and their families, ensuring that the future is secure and prosperous.

Schedule an Appointment to Learn More

If you're interested in learning more about special needs trusts and how they can benefit you or your loved one, please don't hesitate to reach out. We are here to guide you through the process, explain your options, and create a tailored plan that aligns with your unique circumstances. Contact us today to schedule an appointment, and let's begin building a brighter and more secure future together.

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Elder Hands — Pikesville, MD — Michael R. Goldstein, Esquire, LLC

Eldercare and Estate Planning Considerations for Seniors

By michaelgoldsteinlegal • May 1, 2022

Download a PDF version of this article here . Seniors face many decisions when it comes to Eldercare and Estate Planning. Besides planning for retirement, it is important to plan in case of potential sickness, incapacity, or death. It is difficult to watch a loved one age but having a clear roadmap for what might arise eases the strain on the family. Medicare/Long-Term Care Planning Generally, seniors are eligible to sign up for Medicare three months before their 65th birthday. Unless you are receiving Social Security benefits, enrollment is not automatic, and you will not receive a notice to enroll. You must reach out to Social Security by phone, online, or in person to enroll during your Initial Enrollment Period. Not enrolling in a timely manner can lead to gaps in coverage and late enrollment penalties for life. Medicare consists of Part A, which is hospital insurance and for most people is premium-free. Part B is Medical Insurance and covers labs, imaging, and outpatient doctor visits. Part B has a premium that is set by Congress, which is $148.50 in 2021. Part D is a drug plan subject to a premium. Part C is Medicare Advantage, which is a private insurance alternative to Original Medicare. Seniors who are self-employed, have coverage in the individual market, or work for an employer with fewer than 20 employees should sign up for all parts of Medicare before their 65th birthday. If you are working for a group employer with more than 20 employees, it pays to compare the costs and benefits of your current employer plan with that of Medicare. SHIP counselors (shiptacenter.org) are available in every county to help seniors enroll in Medicare and answer any enrollment questions. Medicare covers limited short-term skilled nursing care only and does not pay for care for those who need to be in a nursing home for chronic conditions. It also does not cover custodial care in the home to help with activities of dai- ly living. Long-term care is covered by long-term care insurance, private pay, or by Medicaid. Medicaid is a joint federal and state healthcare program for low-in- come adults, elderly adults, children, and people with disabilities. In many cases, a couple needs to spend down assets to qualify for Medicaid or advance planning is required. Estate Planning Many seniors have already written wills and estate plans, and many of these need to be updated. For example, chil- dren may have left the house, and there is no longer a need to set up a trust for life insurance proceeds. The need for life insurance may also have dwindled due to dependents leaving the house, and the increase of retirement assets. It is important to review the estate planning documents with an attorney and make sure they are up to date and still reflect your wishes. Proper planning will leave your loved ones with a roadmap to deal with difficult decisions and avoid federal and state tax consequences. A will transfers assets after death according to your wishes. You also need to appoint a Personal Representative to execute the will. Wills are filed with the probate court. Orthodox clients will also want to complete a Halachic Will to comply with the Torah’s laws of inheritance. A Living Will communicates your treatment wishes should you be unable to make healthcare decisions for yourself. A Healthcare Power of Attorney will appoint an agent to make healthcare decisions for you in cases of incapacity. Orthodox clients may also want to add a rabbi to consult to ascertain the halacha in cases of doubt. A financial power of attorney ap- points an agent to make decisions for you should you become permanently or temporarily incapacitated. In most cases it makes sense to have these documents go into effect immediately and not upon disability to ensure they can be used most effectively. A trust is a legal entity to hold, safe- guard, distribute, and control assets. Trusts can avoid or reduce taxes, remove assets from the estate, or set aside money for minors or a charity. Taxes are the final matter to consider. Estates lower than $11.7 million for individuals are exempt from federal estate tax through 2025. In 2026, the exemption will revert to $5.5 million with an inflation adjustment. In Maryland, estates lower than $5 million are exempt from taxation, and married couples can shelter up to $10 million with proper planning. In conclusion, given all of the myriad changes occurring as couples or individuals age, it is prudent to plan properly to ensure loved ones are taken care of and their wishes are carried out. Even those without significant assets should engage in the estate planning process. Michael R. Goldstein, Esq. advises clients on wills, estate planning, and non-profit entity matters in Pikesville, MD. He has a background in insurance and financial planning. He is actively involved in his synagogue and serves on the boards of Jewish Community Services (advisory) and the University of Baltimore School of Law (alumni). Please contact us for a free initial consultation.

Living Trust Paper — Pikesville, MD — Michael R. Goldstein, Esquire, LLC

Estate Planning For Families In Their 30s, 40s, and 50s

By michaelgoldsteinlegal • December 1, 2021

Download a PDF version of this article here . Now is a great time to consider drafting or revising one’s estate planning documents. People in their 30’s, 40’s, and 50’s are often not aware of the need to start the process early. Typically, people in this stage of life own a home, own life insurance policies and retirement accounts, and have minor children. All of these factors require careful estate planning. The first document that is required is the will, which divides property upon death. Dying intestate means passing away without a valid will. In such a case, the state will divide the probate assets by giving one half to the surviving spouse and one half to the minor children. Many people do not agree with this arrangement, so it is advisable to write a will. Non-probate assets (i.e., life insurance) or assets jointly owned will pass by way of contract to the beneficiary or joint owner. In addition, the will appoints guardian(s) for minor children if both parents should pass away. Choosing a guardian ahead of time allows one to pick a suitable person to care for one’s children and will remove this decision from the court. Next, a beneficiary is the person who receives the proceeds of life insurance or a retirement account. Typically, the primary beneficiary is the spouse, and the secondary beneficiaries are the children. In many cases, children are selected as beneficiaries outright even though they are minors. This is problematic given that a life insurance or financial services company cannot issue a check to a mi- nor child. Even if a child is 18 or older, many parents do not trust their young adult children with large sums of money. A testamentary trust is a great solution to this problem. The trustee(s) of the testamentary trust will manage the proceeds of the life insurance and retirement accounts until the children are older (age 25 or more). The trust can also define at what age the principal and income will be distributed. Pooled trusts place all of the money in one place for the children, and individual trusts allow children to have their own pot of money. Special Needs Trusts (SNTs) are also important to set up if one has special needs children, to keep them eligible for public benefits. Many times, couples under-insure or do not carry life insurance for the home- maker spouse, who may also be working part time. This is a big mistake given that if the homemaker spouse should pass away, then the surviving spouse will incur additional expenses related to taking care of the house and the children. Estate tax planning is necessary for people who own assets close to $5 mil- lion in Maryland as estates valued at over $5 million are subject to state estate tax. Everything is counted as assets from jewelry to cars to bank accounts. Life insurance policies are also counted as assets, and therefore one can reach the tax threshold quickly. In addition, estate tax laws and thresholds can change, and it is advisable to set up flexible strategies such as disclaimer trusts and ILITs (Irrevocable Life Insurance Trusts) to deal with these situations. Medical and Financial Powers of Attorney (POA) These two documents are executed for situations when individuals are alive but are incapacitated and are unable to make decisions. The Medical POA appoints an agent to make healthcare decisions. (Orthodox clients typically appoint a rabbi in the POA to ascertain Jewish law.) If people do not execute a Medical POA, the medical facility may consult someone without the patient’s agreement to make decisions about their care. The Financial POAs are two documents (statutory and supplemental) that allow one’s agent to manage their financial affairs upon temporary or permanent incapacity. The agent can open mail, apply for government benefits, file taxes, and sell real estate, etc. Without these documents, a person’s family will have to commence guardianship proceedings in court to manage their family member’s property, which can be costly or unnecessary. Halachic Will In addition to the documents mentioned above, a halachic will addendum is written for Orthodox clients. This document creates an incentive for the halachic heir(s) to follow the secular will and allows the surviving spouse to inherit everything (even for wife) or for property to be evenly divided amongst the male and female heirs. This document is approved by the Beis Din of Baltimore and does not need to be redone as assets change; therefore, it serves as an advantage to other methods used. In conclusion, it is wise to start the estate planning process as early as possible and to revisit it every couple of years as one’s situation changes. Michael R. Goldstein, Esq. advises clients on wills, estate planning, and non-profit entity matters in Pikesville, MD. He has a background in insurance and financial planning. He is actively involved in his synagogue and serves on the boards of Jewish Community Services (advisory) and the University of Baltimore School of Law (alumni). Please contact us for a free initial consultation.

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