Special Needs Trust

Parent Q&A

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  • Hi BPN: Our beloved Young Adult Kid recently graduated from a UC and is enjoying a hard-earned break before charting next steps. YA Kid worked very hard at school and earned decent grades but emerged with neither a good education nor any skilled or pre-professional work experience. YA Kid has a learning disability severe enough that it will be difficult to impossible for them to meet most employers’ expectations, but not severe enough to qualify for or warrant government assistance. YA Kid appears poised to be a low-wage worker for the indefinite future. [If responding to this post, please hold any feedback regarding treatment for neurological disability, developing alternative skills, the potential that we underestimate YA Kid’s ability or employment prospects, or the fact that this is a question born of privilege. We know that and it is not the point of this question. Assume that we have pursued all avenues and that the scenario presented is accurate.]

    Our friends and family who are parents of young adults are proudly anticipating their plans to stop or substantially reduce financial support to their college-graduates. We, on the other hand, are considering providing our disabled YA Kid with a small guaranteed basic income that, combined with a low-wage job, would enable them to live independently in a geographic area of their choosing, pay for health care after age 26, and save for purchases like a car and insurance or travel, all of which many low-wage working adults struggle to do. Research from government-sponsored universal basic income programs suggests that recipients are not disincentivized to work, rather they use universal basic income to stabilize their lives by spending on reliable transportation, housing, and capacity to absorb emergency expenses. We do not imagine an amount that would enable YA Kid to do nothing. We are considering a limited but consistent amount that would enable a low-wage worker to live safely, out of poverty, manage their own finances, and save for future goals.

    We don’t know anyone else who is thinking this way about financial support for their non-disabled college-educated kids. Have any of you in the BPN community considered and/or tried explicitly setting a guaranteed basic income for their non-student young adult kids to supplement their earnings (as opposed to helping out as-needed or continuing to cover specific expenses like cell phone service, health insurance or other essentials) after some initial post-graduation period of job-hunting or entry level job? Any pros or cons that you’ve considered or experienced? Thoughts about why, why not, and how to provide on-going financial support for disabled adult to have a middle-class standard of living (if there is such a thing)?  Thank you for sharing your thoughts.

    I suppose the question assumes that you are financially secure enough to see that the guaranteed income continues past you and your spouse's lifespan through your YA's mid to old age, in which case, there are certainly lawyers who can, as is done for continuing care of more severely disabled adult dependents, establish a third-party special needs trust account that will continue through your YA's lifespan. I think the hardest part of the question is whether or not your YA will be able to function independently in terms of securing and paying for the services you mention, (healthcare, cell phone, insurance, etc) above and beyond securing and maintaining employment. I'm sorry that I have no advice to give, but we have a disabled niece who has a similar trust established but will need supervised care. I hope there are others here that can offer assistance. Good luck to you all.

    If you're able to do that, I think it's a kind idea - but tie it to a set of requirements that show you have solid expectations and respect for your child. The income is theirs IF they maintain at least a 32 hour workweek or whatever. Or provide incentives for getting and keeping decent jobs and making good choices, not slacking off etc. Just make them part of the solution, bc otherwise it would be easy to create dependency where there might not need to be any, and you send a strong message that suggests you don't think they can do it on their own. If there are years that they actually can live wholly independently, say you'll bank that income for them, towards a home purchase or a rainy day, etc.

    I can speak to being on the receiving end of such an arrangement. In my mid-20s, I started a 7-year PhD program that paid extremely little. My mother decided to give me $400 per month while I was in grad school, and it honestly was a godsend - this was in 2004, so obviously this amount would not go as far these days. While finances were still tight, this money meant that I was able to afford a safe, quiet place to live, and I didn't have to worry about being able to afford groceries. I will always be grateful to my mom for this, and I absolutely plan to do something similar for my own kids, if I can afford it, and if they need it.

    This sounds like a really good idea. Many of my friends' children, and my own, have needed help of various sorts through the twenties, and given that your child has a LD it may take them longer. One note of hope -- my niece who is now 30 is finally pretty much independent (getting help structuring her life from friends rather than her parents.) You know your child, and if you  think this kind of help will keep them as independent as possible it is a great idea. Also, things are much harder for young people than they used to be in the job world -- expectations are much higher for professional jobs.

    Honestly, if you can afford it, this sounds wonderful. I have a neurodivergent young adult kid and have had to realize that they need different support than my neurotypical kid. For example, living at home a lot longer than most of their peers. If it doesn’t work, you can always change things. If your kid is disabled there are accounts, called an ABLE account that may have some tax advantages, especially if they end up on SSI and working only part-time. I have not used these accounts for my kid, but heard from other parents that they are useful. You sound like an awesome parent- facilitating your kid’s independence and well-being in a loving way!

    This is indeed a tricky situation. I am in a similar situation with one of my YA kids (love that term!), although mine did not attend college. They have been working in the same full-time, low-wage job for two years, although they get no benefits.

    My first suggestion to you is to consult an attorney and tax expert. I discussed these issues with my attorney and tax advisor/preparer when I set up an estate plan. There are legal and tax implications to your decisions.

    For now, my YA kid lives a hand-to-mouth existence (as I did at their age). They support themselves and receive a very small monthly stipend from their dad. I have them on my mobile phone plan. We occasionally go grocery shopping together, and I pay for their groceries. I tend to give things like a computer or airline ticket as birthday or holiday gifts. Their dad and I pay for health insurance and expenses. They are beginning to see how difficult it is to live this way which I hope will encourage them to either find a job with benefits or enroll in school or a training program to get a higher paying job with benefits. Their dad and I will jointly support them while they are in school or a training program. Still, they are not likely to lead to a stable, comfortable, middle-class life anytime soon. I'll make decisions as to increased support as we go along.

    It's worth it to say: they feel proud of their ability to support themselves now, even if they are not living the lifestyle I would wish for them. They live in a safe neighborhood in an older apartment complex and have little disposable income. They do not want a monthly stipend, and are working toward not taking one from their dad. They appreciate one-off support for things like furnishing an apartment or purchasing a car or adopting a pet. But, they take pride in earning the money for the day to day cost of an apartment, car, and pet.

    I have addressed long-term support for HEMS (health, education, maintenance, and support) as defined by the IRS in my estate plan, so they will have support upon my death (whether that be supplemental or full support, if needed). I don't have a special needs trust, that is not warranted in our situation. Rather, I have named a fiduciary to manage the estate and oversee their support over their lifetime (assuming the funds last). Two family friends are named as advisors to the trust so there is a check and balance to ensure my wishes are carried out.

    It sounds like you are considering something quite different. But, I thought I'd share what's working for us. Each family and situation is unique. As thoughtful as you are going into this, you'll find what works for you.

    I have not done this but considered doing it (then my YA Kid's circumstances changed!). I think it is a great idea.

    You don't mention your finances. I encourage you to meet with a financial planner and make sure you have enough for your retirement before committing to this. It might be good to start with a smaller amount annually to your kid, both bc you can always increase it later and bc 25 year olds normally have lower income (and lower expenses) than 45 year olds.

    You also don't mention your kid's executive functioning. Getting the money monthly may work well, and it may not. Paying specific expenses (eg rent) directly ensures they will get paid Of course if you go this route, you will need a trustee who can continue this after you pass away (you'll need that for a monthly lump sum as well, but much less work to do that!). Certainly you can try it monthly, but I would explain that it is an experiment that you want to try for 3 mos or 6 mos or whatever. I think it is fine to say that you committed to helping them financially - that part doesn't have to be presented as an experiment - but that you want to figure out the best way to do it, with input from them and also by trying out different options.

    Finally, depending on the amount you plan to give annually, there may be tax implications, so be sure to talk to your tax professional...

    We may be facing that too. We're a few years behind you so we'll see. I'm also the ttee a special needs trusts for a sibling who sounds somewhat like this. I can't speak to if it demotivates or helps. With my sibling I do think it demotivated them but they wouldn't have made much of their life anyway. Despite being very smart, they are unable to manage their life at all so they probably would be living on the street without it. But my understanding is that special needs trust are for those who receive government benefits that they would lose if they received the money outright - like SSI or medicaid. So a special needs trust may not be the right fit but there are other trusts. I have a friend who is a trustee for their sibling, who is like mine except is not receiving any benefits so they had to make a different type of trust for him, I can't remember what it's called but it basically it means he doesn't have direct access to inheritance from the parents. Both the special needs and these types are written up as sub-trusts in your trust, it will outline what his money can be spent on - rent, medical costs, food etc and that's it. Then after your death, they become stand alone after your death (you have an attorney draft a trust certification so that you now have a stand alone document that you'll need to set up a bank account etc).

    2 things - outside administrators (usually attorneys) are costly and will eat into the funds. And attorneys are full of misinformation - because each person has different set of benefits with different requirements and even the attorney who writes up your trust/subtrust doesn't not understand how these interface with benefits.

    Anyway I'd suggest you look into the "Truelink" prepaid credit card. https://www.truelinkfinancial.com/families We use this and it has been a godsend. You control it, you can load it as much as you want and set limits on how much and where he can use it. He has the card, feels independent but you control it and view all activity. Perhaps you can give him x amount each year as part of the gift amount one can do, and get a routine going. Then if you ever need someone to take it over, it will be smooth running (the hard part is setting everything up). Then also do a sub-trust in your trust that outlines the limitations. The funds in this trust can be held in a bank and also mutual fund (for growth). Set up auto-funding to Truelink. If it is simple and already running, you can probably have a family friend be the ttee (or find 2, one as a back up watch-dog) and it should only take an hour a month (but you still have to pay them because it is all hassle). Many people handle their parents' trusts so you'll know a few people who may take it on. Make sure they are totally trustworthy and also that they provide monthly statements of all assets. I think annually is what is required, but I feel annually just leads to misuse.

    Re thoughts on this. As you have stated, you have already tried everything else. These funds will provide security and it is your money to do as you wish, and for most parents that is help their child. If they are constructive, hopefully it may even lead to more independence. If they are destructive, maybe turning to drugs then keep a tight rein on cash and how much you give. I really hope it works out for you. I'm already impressed about college! Wish you the best.

    "Guaranteed basic income from parents" is a pretty funny way of recharacterizing a "trust fund."  These are extremely common for those families with the wealth to create and secure a trust fund for their children.  The question about whether a trust fund hurts or helps a kid is pretty hotly debated (wealth poisoning, dependency, incentives, entitlement, etc. etc.) and many trust funds dissolve when kids are through college and they are presumed to be responsible enough to manage the funds for themselves.  Not all of them are though and a lot of trusts are designed to be modified so that if a parent doesn't think their kid could manage getting a big payout that the trust continues in a restricted capacity, with trustee oversight forever. 

    So, lots of wealthy kids out there who have no learning disabilities whatsoever are sitting around receiving basic incomes from their parents for many years after they get out of college.   I wouldn't fret.   If you can afford it, it's a big gift that will protect your kid from the types of cascading catastrophes and debt traps that those who have no other choice get ensnared into every day in our country. 

    If your kid is receiving government benefits as a result of their disability this is something to get professional advice around because the income you provide to them may impact their ability to receive government assistance from income qualifying programs.

    Just to add on to the last poster's very useful comment, the expert in our area on Special Needs Trusts (SNT) is https://www.urblaw.com/ - Urbatsch Law Firm. Kevin Urbatsch wrote two books on SNT that standards out there - one on SNT and the other on administering a SNT. These are very useful. But again it would all depend on WHAT benefits a child gets, each has their own set of rules. Some are very restrictive (ssi etc) and others less so (ssdi) these are just 2 examples. Even then you must always make sure any info you receive is for the specific benefit your kid gets, not general info. 

    Most attorneys will include those who will add a SNT within a parent's trust they have no real understanding of how it works with the benefits and often provide all sorts of misinformation, just because each case is so individualized.

    But it's not clear that a SNT is appropriate for your kid. Maybe a different type of trust.

  • My sister has a middle schooler with some special needs, and the good news is she has two close friends who are willing to raise her son jointly as his guardians. (FWIW, I'm not the guardian b/c a cross-country move from NY would be too disruptive for him and these friends have known her son all his life.) The rub is that her husband has been dragging his feet for years to do any estate planning and appoint guardians, even though he is apparently OK with the guardian plan and does not want his family to raise their son. I saw her recently and reiterated that they really need to get this done, and from her response, it doesn't sound as if she thinks much progress will be made. Is there anything she can do independently to build in some safeguards until her husband finally agrees to move forward? Can she do her own will without her husband to at least document her preference for guardians? Other ideas? Thank you BPN!  

    Under California law parents need to nominate a guardian in a will. In the unlikely and tragic event that both parents die simultaneously, if one of them has nominated a guardian in a will, that choice will be respected. Your relative may just want to do her own will with guardian nomination, but should check out the law in New York state.

    If the husband is on the same page as she is but just dragging his feet in terms of getting it documented, couldn't she make an appointment with an estate planning lawyer, get all the paperwork done, and then present the documents to him to sign? His signatures will need to be notarized but there are notaries who will come to your house, if that's what it takes.  My husband was a pain about this process too - I think there are some people who feel like making a will is the first step towards death or if they don't make a will, they won't die.  

    It seems to me that guardians are only needed if both of the parents are dead. If she creates a will naming the friends as guardians and she and her husband die together, say in a car crash, and the husband doesn't have an estate plan, guardianship should follow whatever she specifies. Same goes if he predeceases her. The only problem come up if she predeceases him. I'm no lawyer and don't know what the courts would do in that case, but I suspect the estate plan of the wife would have some weight, even if she had died some years before.

    Or she can just go to an estate lawyer, get everything written up, and ask him to sign. That's not ideal, and he could always balk at that point which would mean money wasted. But it sounds like there's general agreement and it's just the process he's dragging his feet on.

    A trip to an estates attorney would be the way to go.  Possibly you could be one of the trustees if she sets up a trust (which seems like a good idea but I am not a lawyer and she should check with a lawyer).

  • Financial Planner for Special Needs

    (1 reply)

    I'm looking for a financial planner, preferably fee-only, who is well-versed in Special Needs planning. Local would be nice, but in this virtual era (zoomopocene?), not necessary.

    Thanks!

    Our special needs attorney recommended James Bassett (with Edward Jones) in Danville and he has been managing a special needs trust for us for the past few years. We have been very happy with him.

    James Bassett | Danville CA Financial Advisor | Edward Jones

Archived Q&A and Reviews


Attorney for special needs trusts

Sept 2014

I'm looking for an attorney with experience setting up special needs trusts for family members with mental health issues. Ideally, that person would be not only smart but compassionate. I'm pretty sure I need this kind of trust, but hope the person could advise me about whether a living trust is a better choice. Anon


The Academy of Specials Needs Planners has a list of attorneys who specialize in Special Needs Trusts on their website: www.specialneedsanswers.com. You'll likely find great resources there. Audrey


Kevin Urbatsch is an expert on special needs trusts http://www.myersurbatsch.com/about-us/your- legal-team-attorneys/kevin-urbatsch/ and, because of his established expertise, we asked him to draw up a special needs trust for us. He's very knowledgeable for sure, but he's also extremely busy, and when we had questions after the SNT was completed, he didn't respond to phone calls or emails. (Friends of ours who have used Kevin's services have had a better experience though.) Eventually we turned to Greg Wilcox (510) 665-8400 gregwilcox-atty [at] comcast.net on Shattuck in Berkeley, because another friend has been very pleased with Greg's assistance with her brother's SNT. When my husband and I worked with Greg, we eventually decided that a discretionary trust was the more appropriate strategy for our family situation. Greg was very helpful and thorough, and we recommend him. Best wishes. Anon


I would like to recommend attorney Linda Durston. She can be reached at 510/526-1376, and is at 1604 Solano Avenue in Berkeley. She was actually recommended to me by a woman at the social security office to set up a trust for my brother. Ultimately I decided I didn't need one, but she seemed very knowledgable about this specialized kind of work. Her website is http://www.durstonlaw.com/Special.html Lori po8dancer [at] yahoo.com


For special needs trusts, talk with Kevin Urbatsch at Myers Urbatsch, PC in San Francisco. I've worked with him on several occasions with my clients and he's knowledgeable and a warm person to work with. If you want an East Bay person, talk with Linda Durston on Solano Ave. in Berkeley. She does estate planning and elder law. Joanna


Linda Roodhouse in downtown Oakland. She is a fine person and understands the situation. http://www.lombardiloper.com/attorneys/linda-roodhouse/ Julia


Special Needs Trust lawyer familiar with NY laws?

Aug 2013

Hi - My family is looking to set up a Special Needs Trust for my adult brother, who lives in Manhattan. Does anyone know of an attorney either practicing in NY or familiar with NY benefits laws? My brother lives on his own and gets SSI, but we would like to supplement this a little now and then (for clothing, gym membership, etc) and make sure that when our two sets of parents (one in DE and one here in CA) pass away that he will have a little security. Any help appreciated. Thank you. Grateful sister


I can recommend a couple of NY elder care, disabled and trust attorneys - which are closely related issues.

James A. Robbins ROBBINS & ASSOCIATES, P.C. Attorneys at Law 60 East 42nd Street, Suite 4600 New York, New York 10165 (P) 212-808-0444 (F) 212-808-4150 Set up complex trusts for my family

I have less contact info, but a strong reco for another: Ellyn Kravitz, 3rd Ave near Grand Central Station very experienced with New York Medicaid, and with elder law generally. Hope this helps


2008 - 2011 Recommendations


Future plans for special need children

April 2008

We have two Special Needs boys. they are 11 and 7. our 11 Y.O. has Fetal Alcholism, ADHD, mild retardation and Social problems. My 7 Y.O. has verbal apraxia, so he speaks very little, he is also very socially and developmental disabled. All of these, (most anyway) are invisable, so on sight my kids look perfectally ''normal''. This is a bigger problem than people understand, and as they get older it increases in degree of difficulty.

Here's where we need advice. Someday we will not be around to arrange their lives. that day may be 10 or 20 years away, but my partner and I cannot help but wonder how they will get through life. So the question is, are there parents, like us, out there who have come up with some ideas on how to leave your Special Need family members when you are no longer around to protect them. Any thoughts would by helpful.


I too am the mom of a special needs boy (now 12) and I have lots of anxiety about his future should something happen to me. I think your fears are very common and normal to have. But there are steps you can take to protect your kids. One is establishing a special needs trust. This would require an attorney but it protects your children legally if something were to (god forbid) happen to you. A family law attorney should be able to help you establish a trust for your children. Best of luck


 Lawyer needed re guardians for special needs child

October 2005

We are looking for a lawyer who is specialized in setting up guardianship. We don't own anything so we don't need a trust. We want to make sure that our child is taken care of in case we can't. Our child may fall into the category of special needs, but we will only know for sure in a few years. Any recommendation? -a


The Dale Law Firm hosts free workshops on limited conservatorships and special needs trusts (in Walnut Creek and S.F)for parents of special needs kids- they may be able to help you or refer you to someone who can. Their website is http://www.achievingindependence.com/ and their workshops are posted in the calendar section of ''The Source'', newsletter of the Family Resource Network of Alameda County. FYI: Family Resource Network is a great source for information, referrals, support groups, etc re caring for children with special needs and their phone is #510-547-7322. Peggy


I can recommend the Law Offices of Jessica Watson to help with legal issues involving children. I felt Ms Watson was knowledgable and approachable. http://sfchildandfamilylaw.com Pascal


Financial Planner for Special Needs Trust

May 2005

I'm looking for a financial planner with experience planning for a special needs child as well as retirement and college. I would want to use fee-based services. I'm also looking for a lawyer with experience setting up special needs trusts. Any recommendations from other families with special needs children? Jessica


Special needs, college, retirement financial planner: Pat Jennerjohn of Focused Finances in Oakland (510) 763-3851. She's fee only and her fees are reasonable. Special needs attorneys: The Dale Law Firm (www.achievingindependence.com). They also have free introductory classes.
Diane


Attorney for Special Needs Trust

October 2003

Can anyone recommend an estate planning/wills attorney specializing in setting up estate plans and special needs trusts for a family with a disabled child who will need life long care? Thank you. Diane


I have heard an attorney give a talk on special needs trusts. Her name is Polly Levin at Stephen W. Dale & Associates in Walnut Creek. Phone: 925 280-0172; www.achievingindependence.com. The law office also gives free workshops. Kathy R.


I believe that the Law Offices of Robb and Ross in Mill Valley specialize in just that. (415) 332-3831


I do not have a disabled child with special needs, but my lawyer is a wonderful woman that specializes in wills, trusts, estate planning and probate. She'll research everything to do what's best for you. She's easy to work with and will put you at ease. Everyone that I've sent to her has been extremely happy with her work. I highly recommend her.
Linda J. Miller 2140 Shattuck Avenue, Suite 604 Berkeley, CA 94704
Katherine