Six Secret Legal Concepts You Need to Know as by Paul Lemieux, Esq.
It is common to see parents and family
members addressing their legal challenges in crisis
mode rather than in a thoughtful, prepared manner.
Here’s a few items you should have at least
given some thought to, before your child becomes
of age:
1. Your own estate planning. Having your “Advance
Directives” prepared and shared with your
physicians and necessary family or nominated
agents. In Florida, the Advance Directives are
made up of a Durable Power of Attorney, Health
Care Surrogate, Living Will, and the Pre-Need
Guardianship Declaration.
It is never too early to have these documents
done, and anyone 18 and over should have these
created for them. Not having these Advance
Directives leaves too much to a family’s “best
guess” and only makes things harder at an already
challenging time.
The last thing any child needs, let alone a
handicapped one, is to not know who will be supporting
their own support system. Do not miss
out on your estate planning documents. Having
this done will ensure there is a safety net not only
for yourself, but for your children.
2. Get help navigating the legal system. A
meeting with an attorney who understands your
situation and can advise a plan forward will be
worthwhile years after you even forgot what his
or her hourly rate was. Take the step to meet with
one or more attorneys and find one that you feel
comfortable having as part of your team for years
to come.
3. Put a team together. Through your support
networks you should be able to find an attorney,
CPA, financial advisor, and social worker who can
not only provide direct support to you and your
family, but through their own contacts can open
doors to information you didn’t even know was
out there.
4. Know your trusts. In planning for the
ongoing care of your child, there will always be
expenses, some expected, and some not. Setting
up a Supplemental Needs Trust is important in
ensuring stability for your child. There a different
kinds of trusts, however. A Self-Settled First
Party Trust is one that is created to be funded by
the individual receiving the care. The disabled
individual must be under 65 when it’s created and
funded, and the creation must be by that disabled
person, their parent, grandparent, guardian, or
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court proceeding. Even though the trust may be
created by the individual in need, it cannot be
managed by them, but by an independent third
party as Trustee. The drawback to this trust is that
it must have a Medicaid payback provision.
A Third Party Trust is similar in nature to the
First Party Trust, with two notable exceptions.
One, it must be created by anyone other than
the disabled person, such as parent, grandparent,
guardian or court and funded with assets of the
donor; and two, it does not require a payback to
Medicaid. This trust is usually more complicated
to manage, but ultimately may be more useful.
This trust requires planning ahead and having an
idea of where the funds will be coming from to
fund the trust.
Another type of trust that may be useful is a
Pooled Trust. This trust is also irrevocable, but it
has usually already been created by a non-profit
entity, who is also the trustee, for the purpose of
managing funds for a large group of people. A
third party, such as parent, grandparent, guardian
or court, will sign the joinder agreement to
establish an account with the trust. This trust
also requires payback to Medicaid, if Medicaid
services have been utilized, upon the demise of
the lifetime beneficiary. The benefit to using a
Pooled Trust is that it is managed by a corporate
(non-profit) trustee and it takes much of the management
challenges out of the equation.
5. Investigate the possible use of an ABLE
account. The Achieving a Better Life Experience
(ABLE) Act created the process to allow individuals
with disabilities and their family and friends
to deposit funds into an ABLE account while
maintaining government benefits. To qualify for
an ABLE account the disability has to have occurred
prior to age 26, however, the account can
be started and opened at any age. Contributions
will initially be limited to a total of $15,000 (in
2018) per year and adjusts with the annual gift
tax exclusion. The funds can then be invested
and grow tax free. An individual can have up
to $100,000 in their ABLE account before the
account starts counting for SSI (Supplemental
Security Income). For Medicaid they can have
up to $418,000 (Florida’s limit for 529 Educational
Savings Plans). The ABLE account grows
tax free provided the funds are used for qualified
disability expenses. Florida Medicaid has a lien
on Florida ABLE accounts upon the death of an
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