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Just as caring for a dependent with special needs is a family affair, so is the related planning.
It is recommended that caregivers host a meeting with family/friends to discuss the future medical, educational, and housing needs of their dependent with special needs. Share information about your and your dependent’s vision of the future and discuss any concerns and options for future care.
Here are some recommended topics of discussion.
Letter of Intent – (Recommended to be completed prior to meeting)
Definition: A Letter of Intent can be used as part of a special needs estate planning process. Although it is not legally binding, this document provides direction for the person(s) who will care for the dependent with special needs in the future. It should detail medical history, daily care needs, housing and services, as well as specific wishes and expectations as they relate to the dependent’s future. It is a working document for the future caregiver(s) to follow that is updated regularly.
Special Needs Trusts
A special needs trust may offer a means of protecting a dependent with special needs’ eligibility for government benefits, while addressing their ongoing care and needs.
In general, a trust is an arrangement by which property is held by one party (the trustee) to benefit someone else (the beneficiary). Different types of trusts suit different needs and may have different tax implications.
A trust created to benefit a person with special needs can:
What is an ABLE Account?
ABLE (Achieving a Better Life Experience) accounts allows eligible individuals with special needs who have a disability that manifested itself before the age of 26 to open tax-advantaged savings accounts. Only one ABLE Account can be opened per eligible individual. The account can be established by the eligible dependent with special needs, or their parent, legal guardian, or agent acting pursuant to a power of attorney. ABLE Accounts are developed and managed on a state level. Most states allow deposits from out of state residents so even if your state does not have the program you may still be able to sign up for another state’s account.
Contributions can be made by anyone, including the dependent with special needs, family members, friends, etc., and must be made in cash. There are annual contribution limitations, as well as maximum accumulation amounts. Any amounts over the maximum accumulation amount could affect the dependent’s eligibility for government benefits.
The funds accrue income tax free and can be used for a range of expenses related to the disability of the dependent. Upon death of the dependent with special needs or termination of the account, there is a Medicaid pay-back provision regardless of who deposited the funds.
For the most current information and states that offer an ABLE Account, please visit www.ablenrc.org
Your team of professionals
It’s important to pull together a support team of professionals that can help guide caregivers through the variety of options available to plan for the future care of dependents with special needs.
The composition of the team may vary depending on your unique situation, but it should include professionals who have experience in working with special needs families, such as:
SpecialCare is a program created by MassMutual that provides access to information, specialists and financial solutions to people with disabilities and their families. For more information about Massachusetts Mutual Life Insurance Company (MassMutual) and its SpecialCare program, please visit www.massmutual.com/specialcare.