1. James A. Singler
Calfee, Halter & Griswold LLP
513.693.4875
jsingler@calfee.com
Calfee, Halter & Griswold LLP, 2800 First Financial Center, 255 East Fifth Street, Cincinnati, Ohio 45202
Cincinnati | Cleveland | Columbus | Calfee.com
Special Needs
Planning

2. Introduction
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Disability
• 2% of U.S. population born with disability or later becomes disabled
• Mental retardation, cerebral palsy, epilepsy
• Autism at epidemic proportions
• Veterans injured at war
• Terminology: “Special Needs” is the commonly accepted term
• Use of the word “typical” instead of “normal”
• What will happen to my child when I am no longer here?
•Note: Data derived from the Ohio State Bar Association

3. Special Needs Planning
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Common Terms
• Special Needs Trust : A general term to describe a Trust which is for a
special needs beneficiary, but there are various types
• Medicaid Payback Trust: 42 USC § 1396p(d)(4)(A). Also known as
a “(d)(4)(A) Trust” or a “Payback Trust.”
• Pooled Medicaid Payback Trust
• Supplemental Services Trust
• Third Party Trust: Trust created by one party for the benefit of
another
• Wholly Discretionary Trust: Terminology of the Ohio Trust Code
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4. Medicaid Payback Trust
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•Statute states that the assets of a (d)(4)(A) Trust are not countable if
the Trust meets the following requirements
•Trust funded with the assets of a person who is under age 65
•The Trust is established for the benefit of such individual by a
parent, grandparent, legal guardian or the court; and
•The State will receive all amounts remaining in the trust upon
the death of such individual up to an amount paid by Medicaid
•These Trusts are useful where a disabled person receives an
unexpected windfall
•Not a good mechanism for small sums of money

5. Pooled Trust (d)(4)(C) Trusts
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• Good tool for small sums of money
• Similar to Medicaid Payback Trust
• Funded with the assets of the disabled person
• Assets not countable for purposes of Medicaid and SSI
• Established by and administered by a non-profit
• No age restrictions
• At death of beneficiary, the funds may be retained by the Trust. Any
funds not retained by the Trust are paid to the State
• No minimums

6. Third Party Wholly Discretionary Trust
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• This is the Trust we establish the most
• Assets of parent or grandparent
• Cannot be the assets of the beneficiary
• Usually part of a Revocable Living Trust
• At death of Grantor, Trust becomes irrevocable and the assets
for the special needs beneficiary are allocated to the third party
wholly discretionary trust
• Assets not countable for purposes of Medicaid and SSI
• If assets ever become countable, the Trust terminates and assets
distributed elsewhere
• Distributions may be made only in the absolute, sole and
unfettered discretion of the Trustee

7. Programs
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• Federal, State and Local Resources
• Social Security Disability (SSD) and Medicare
available regardless of income or assets
• Need Based Programs: Supplemental Security
Income (SSI) and Medicaid

8. SSI Eligibility
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• Strict income and assets guidelines for eligibility
• Provides $733 per month (single individual) to those who are
blind, disabled or over 65, but otherwise fail to qualify for
SSD
• SSI recipients qualify for Medicaid
• Gifts, inheritance, proceeds from litigation received by
someone receiving SSI benefits are considered income
and/or resources and may disqualify from benefits
• Cannot own more than $2,000 in countable assets
• Not all assets countable, the home and the car are not
countable

9. Disability under Social Security
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• Sometimes severity of disability is not disputable
• One must be permanently and totally disabled
• Benefits do not vary based upon level of disability
• May take months or years for benefits to be granted
• Social Security is a complex area of the law

10. Medicaid
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• State and Federal program administered by the Ohio
Department of Medicaid
• Must be income and resource eligible
• Income less than $643 per month
• Resources of less than $1,500
• Not all assets are countable
• Children may remain on parent’s health insurance
until 26

11. Estate Planning
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Past:
• The thought was to disinherit children with disabilities
• Assets generally given to other siblings with the understanding
that the assets would be used for the special needs beneficiary
• This becomes more complicated with divorce, creditor issues and
lack of trust worthiness
Present:
• Third Party Wholly Discretionary Trusts
• Does the beneficiary have assets?
• Does the special needs beneficiary have capacity to establish
legal documents?
• Small Estates?

12. Special Needs Planning Example
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Facts:
• Ben is 10 years old and has autism. Likely will not be able to
live alone.
• Husband works for P&G and makes $250,000 per year. Mom
stays at home with Ben.
• Ben has a 529 Plan in his name with $25,000 in assets
• There are two other siblings
• Retirement assets of $500,000
• $500,000 home in Mason
• Husband has group term life insurance, two times salary
• There are minimal other assets

13. Special Needs Planning Example
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Ben
• Establish Healthcare Directives, General Powers of Attorney, Last
Wills, and Revocable Living Trusts for the Parents
• Ben’s cognitive ability
• Guardianship, minor and as adult
• Is Ben a beneficiary of another estate?
• Life Care Plan for Ben
• Health Insurance
• Financial Planning

14. Progression of Benefits and Services
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• Early Intervention
• Special Education for children under the age of 22
• Benefit Eligibility: For most of our clients there are no public
benefits availability while the child is a minor
• Transition at 18: Is a guardianship necessary?
• At 18 child may be eligible for Medicaid and SSI
• Transition at 21: End of special education services at age of 22.
Encourage clients to advocate for a good transition plan in the
school.
• Critical Years 22-25: Critical years for establishing a work
pattern, or, some other form of routine.

15. Duties of Local School Districts
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• Child with disabilities is eligible for free, appropriate public
education
• Children under the age of 22 receive specially designed instruction
• Child entitled to receive services in the least restrictive environment
and school district is required to pay
• Students entitled to attend school until they graduate or turn 22
• When they turn 18, the rights transition to the student
• Beginning at least one year before the student turns 18, the school
must inform the student that the rights will transfer to the student at
18
• Parents should have child sign a power of attorney to allow them to
still be part of the process

16. Recent Fiduciary Litigation
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Facts
• Special Needs Beneficiary born in 1980, had a debilitating stroke at age of 15
resulting in cognitive ability of a first grader
• Malpractice claim paid out to a court established (d)(4)(A) Trust
• Trust being administered by large corporate trustee, but this was the only special
needs trust at the bank
• Bank did not want to provide any sort of administration/advice outside of the
investment management services
• Guardian of beneficiary requested resignation. Bank refused.
• Guardian filed a Petition to have the Bank removed.
• Trust document stated that Trustee shall investigate all available governmental
benefits.
• Trustee never investigated governmental benefits
• Trustee removed, with judgment against Trustee for attorney fees

17. Miscellaneous Planning
• Reduction in budgets
• Closer look at older Trusts
• Trust Reformation
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18. This presentation is provided by Calfee, Halter & Griswold LLP for education and
information purposes only. This presentation is not intended to provide legal advice on
specific subjects. The resolution of legal issues depends upon the specific facts of a particular
situation and the laws involved. This presentation may be considered advertising under
applicable laws. Nothing contained herein or in any attachment hereto is intended to be used,
or can be used, to avoid penalties imposed under the Internal Revenue Code.
2800 First Financial Center
255 East Fifth Street
Cincinnati, Ohio 45202
513.693.4880
Calfee, Halter & Griswold LLP
www.Calfee.com
Thank You