Planning for your adult child with autism

April has arrived and with it, Autism Awareness Month. The Centers for Disease Control reports that the incidence of autism among school-age children is now one in 68, (up from 1 in 150 in the year 2000).

Educational support for children on the autism spectrum has greatly improved over the past decades. With early detection and interventions, many children will blossom into fully functioning, independent adults. Others will not, and will require lifetime support. Unfortunately, once a child turns 18, support systems for housing, vocational training and the like are frequently inadequate and difficult to obtain. Therefore, while concerned parents have ample reason to hope for the best, careful planning is prudent. The sooner a thoughtful plan for the child's future is put in place, the more peace of mind parents will have, knowing they are ready for whatever unfolds. 

For disabled adults unable to independently support themselves, there are two main sources of governmental assistance: Social Security Income and Medicaid. Both are means-tested programs. In order to qualify, an individual may not have assets in excess of $2,000. Thus, the central question for my clients who have children or grandchildren  diagnosed with autism is, how to help their loved one financially without providing money that would jeopardize their loved one's continuing eligibility for essential (albeit meager) government benefits?

One option that strikes many parents as logical is to leave money to another child or relative, with the expectation that that the monies will be made available for the disabled child. However, that is almost always a bad idea. Even if the individual you entrust with the funds is devoted to his disabled relative and completely trustworthy, the money could be imperiled if he/she divorces or is sued.

For most parents and grandparents, the best solution to this dilemma is to establish a Special Needs Trust (also known as a Supplemental Needs Trust), with the disabled child as the beneficiary. The trust's funds are not considered the child's available assets and therefore, will not impact negatively on the child's eligibility for government benefits. The funds may then be used for expenses over and above the basics for which the government pays. 

You don't need to wait until you actually have the money to fund the trust. The trust can be the beneficiary of retirement funds or life insurance. Once the legal structure is set up, anyone can contribute to it.

Choosing a trustee for the special needs trust can be a challenge. Although a sibling may seem the most logical choice, remember that administering a special needs trust requires a fair level of sophistication about finances and government benefits. It can be time-consuming, too. Parents often forget that even well-meaning siblings devoted to a brother or sister will eventually have their own lives and careers, and thus, administering a trust can be quite burdensome. A better option may be to appoint a third party trustee, such as a bank, accountant or brokerage firm. The sibling could then be named co-trustee and provide oversight.

If your funds are limited, you might want to look into a pooled trust. A pooled trust is a kind of communal special needs trust run by a non-profit organization. Fees to set it up are generally lower, but there is a downside: unlike a third-party special needs trust, any monies left over in a pooled trust when the beneficiary passes away will generally revert to the state, and cannot be distributed to your family. Read more about pooled trusts in Florida.

Read more about autism, including legal and financial consideration in planning, at Autism Speaks.

New legislation would help families of children with autism, other disabilities

Over the years, growing numbers of parents and grandparents have requested our help to create estate plans that provide for an autistic child. The statistics bear out what we see in our practice: According to the CDC, in 2010 one in 68 American children fell on the autism spectrum, up from 1 in 150 a decade earlier. The dramatic increase over the last decades is only partially explained by better screening and diagnosis.

Fortunately, many on the autism spectrum go on to lead fully functional lives. But for others, it is a severe and chronic disability that requires loved ones to make thoughtful legal and financial plans. One of the strategies we recommend to parents in these circumstances is the creation of a special needs trust to benefit the child.  You can read more about special needs trusts here.

We caution our clients against using a UGMA (United Gift to Minors Act) account as a vehicle to set aside money for a disabled grandchild - in fact, for any grandchild. A UGMA account is easy to set up, but beyond that, this type of account has little to commend it. Read more about UGMA accounts.

A recent and hopeful development in the fight against autism is the ABLE (Achieving a Better Life Experience) Act, currently under consideration in Congress. The bill would allow the creation of non-taxable savings accounts that may be used to cover medical and other expenses of disabled children, while preserving the individual's access to key government benefits and services like Medicaid. Read more about the ABLE Act here. To contact your congressperson in support of the legislation, click here. To contact your senator, click here. 

Also this past week, funding was renewed for the Autism Collaboration, Accountability, Research, Education and Support Act (Autism CARES, for short) that had been set to expire in September. The Act provides funds for education and research, and for the first time, calls for the appointment of someone at the Department of Health and Human Services to oversee all autism-related initiatives. 

Autism lifetime costs in the millions

A study published in the Journal of the American Medical Association -Pediatrics estimates that the cost of lifetime support for a person with autism is in the millions of dollars. If autism does not involve an intellectual disability, the cost is $1.4 million; with intellectual involvement, the cost balloons to $2.4 million. In childhood, the main cost is special education and therapies, and lost parental income. When the disabled child enters adulthood, non-employment and residential care are significant factors.The study's researchers conclude that there is a need for early and more effective interventions. Also, solutions must be found that would allow parents of autistic children to more easily remain in the workforce. Read a summary of the study. 

Our attorneys understand the legal and financial challenges faced by parents of children with special needs. Our law firm can assist you. Read about estate planning for a child with special needs.

Your child with autism: Legal planning to secure his future

April is National Autism Awareness month.  A 2011-2012 survey by the Centers for Disease Control estimates that 1 in 50 schoolchildren falls somewhere on the spectrum. If your child is affected with autism and is unlikely to be able to manage his own finances and affairs when he reaches adulthood, you should seek the advice of an experienced elder law attorney. Your elder law attorney - ignore the word "elder" for a moment - will help you set up the financial and legal framework that will secure your child's future and give you, his siblings and the rest of the family peace of mind.

The core of that legal framework is a Special Needs Trust. Here's how it works: You place property (cash, stocks, bonds, real estate, etc.) in the trust. A trustee you select will manage the trust for the benefit of the child. The child can have no ownership interest in the assets. The trust can be funded during your lifetime, or at your death. Because the money is held in the trust, not directly in your child's name, the funds will not be used by the government when it asses your child's eligibility for benefits, such as Medicaid or SSI. The trust provisions must state that the money is to be spent only for supplemental services and items, NOT on services and items provided by government benefits. For example, trust funds could be used to provide your child with a personal attendant, specialized home furnishings or equipment, supplemental therapies, transportation, etc.

Grandparents and other family members may also contribute to the trust, and you should make it clear to well-meaning relatives that contributing to the trust is the ONLY way to assist financially, since giving money directly to the child could jeopardize his government benefits.

Some parents create the special needs trust prior to their own demise, and prior to their child attaining the age of majority, naming themselves as trustees and selecting one or more of the child's siblings to serve as successor trustee(s) of the trust. Setting up the trust in advance thus gives grandparents and other family members a place to park funds for the child's benefit now or upon their own death. Frequently grandparents would like to have the ability to leave funds to a special needs grandchild, but if there is no special needs trust in place, they will simply "cut out" that grandchild.

If the trust is properly drafted and administered, the state and the federal government will have no claim to the assets and upon the death of the beneficiary, and the remaining trust assets can then be distributed to persons or entities of your choice, be it surviving siblings, a charity, etc.

The above is a third-party trust, and is the most frequently used legal tool to protect a child with special needs, but there is  another possibility: a pooled trust. A pooled trust is set up and run by various nonprofit organizations. As the name suggests, monies from various families are put into one general fund administered by the organization. Pooled trusts are always operated by a nonprofit entity. The advantages of a pooled trust may include:

• Reduced administrative fees.
• A better rate of return.
• Access to professional financial management.
• Access to professional legal management familiar with the rules governing disbursement of funds, thus ensuring your loved one's access to public benefits is not jeopardized.
• If there are limited funds, creating an individual Special Needs Trust can be economically impractical, given the costs of setting it up and maintaining it. A pooled trust can be a cost-effective way to set aside funds for a special needs individual.

However, a pooled trust also has a big disadvantage: When the beneficiary passes away, any funds remaining in the pooled trust will not be returned to the family, but instead will be used to reimburse the government for what it has expended on the beneficiary. 

For more information on the Karp Law Firm's Special Needs Trust, click here.

Autism and the Affordable Care Act

Yesterday the Supreme Court wrapped up arguments on the constitutionality of the Affordable Care Act. The nation awaits the court's decision, likely to be handed down in June. The stakes are high for everyone, but especially for the many families whose children are disabled. These families have already benefited from the law's requirement that insurance companies may not deny health coverage to a child based on the child's "pre-existing condition."  Obviously, striking down the Affordable Care Act would pull the financial rug out from under these families.

   

Ironically, today the Centers for Disease Control released its latest statistics on autism. The findings: The incidence of autism is now one in 88 children -  TWICE the 2002 estimate. More children will be diagnosed with autism this year than with AIDS, diabetes and cancer combined. This sobering statistic follows the recent release of a University of Pennsylvania study showing that the typical mother of an autistic child earns 35% less than the mother of a child with any other kind of disability, and 56% less than one whose child  has no discernible disabilities.  The report attributes the gap to the fragmentation of support services for children with autism, requiring parents to not only provide direct care to the child, but to spend enormous amount of time and energy that must be spent navigating medical, educational and other bureaucracies.

One bright spot for Florida families who do not have private health insurance: This week the U.S. District Court ruled that Medicaid must provide behavioral therapy for children with autism. The Florida Agency for Health Care Administration had argued that it was not obliged to cover this service because it is an experimental therapy. Commercial insurance carriers are already required to pay for this type of therapy.  

Of course, specialized and sophisticated estate planning is required for children with significant disabilities. This ensures that the financial resources and proper legal framework  are there for the child now, and into the future.  A Special Needs Trust should be the legal linchpin of your planning. Find out more about Special Needs Trusts.

Parents and Grandparents: Planning for Your Disabled Child

Parents and grandparents naturally worry about planning for their disabled child or grandchild. And that adds up to a lot of worried minds: According to the 2000 US Census, between 13% - 16% of families are raising a child with special needs. The figures for autism are particularly worrisome; in 2009, 1 of every 110 children was diagnosed with some form of autism. For boys, that figure is 1 in 70.

Today's medical advances mean more and more special needs children are outliving their parents. That makes planning for their lifetime care and support absolutely essential. But beware: Leaving an inheritance outright to your special needs child or grandchild could be disastrous for them, depriving them of essential SSI, Medicaid or other means-tested government benefits.

Instead, a Special Needs Trust - also known as a Supplemental Needs Trust - should be the cornerstone of planning for your disabled child. A Special Needs Trust is a trust you establish with your child or granchild as beneficiary. Funds in the trust may be used to provide items and services government benefits will not pay for - special therapies, specialized wheelchairs, transportation to visit family members, etc. Financial planning also comes into the picture. Often, insurance on the parents' or grandparents' lives provides the necessary trust funds.For a calculator from MetLife to help you determine what your child or grandchild's lifetime expenses will be, click here.

Selecting a trustee for your child's Special Needs Trust also must be done with the greatest of care. Administering this type of trust has special requirements. The trustee will need to work with an attorney who understands the rules of trust administration and what the trust can and cannot pay for, so that your child's government benefits are not jeopardized.

As you can see, the Special Needs Trust is a highly complex instrument. The guidance of an attorney with expertise in Special Needs Planning is essential.