Eastridge Presentation.Revised for Distribution

BRENT A. BUSH, ESQUIRE
SECURITY NATIONAL
TRUST COMPANY
MICHAEL A. BUSH, ESQUIRE
BOWLES RICE LLP
WITH
EASTRIDGE HEALTH SYSTEMS
“Tomorrow Comes Too Soon”
Copyright 2015 Brent A. Bush Michael A. Bush

Workshop Goals

A Word of Caution . . . .

I. Defining a
“Special Needs Plan”
II. Estate Planning Tactics
III. Special Needs Trust as a
Solution
IV. Conclusion

 Enhance life for our family member with
special needs
 Enhance /sustain quality of life for our
family
Planning Objectives

Commonly:
Just disability and estate planning,
perhaps including “guardianship.”
What is special needs planning?

Holistically:
 To optimize public entitlements for health care,
education, housing, etc. while enhancing and
supplementing the quality of life for
somebody under a disability, by devising plans
to accomplish this during our lives, that will
endure past our death.
 Balancing other family goals and member
interests to accomplish many objectives
** Section 1614(a)(3) of the Social Security Act
What is special needs planning?

• Intellectual disability
• Stroke
• Mental Illness
• Advancing Age
• Head Injury
• Other cognitive or neurologic disorders
• Age
• Physical limitations
Functional or categorical determination?
“Special Needs”

Allocation of Resources
Time, Money, Energy toward Goals
Family Needs
Education
Residential
Financial
Healthcare
Government Benefits
Employment
Recreation
Legal

Identify Needs
Identify Resources
Establish Goals
Develop Strategies

Family
Mom
and Dad
Child 2
Special
Needs

Means-Tested Resources
 Medicaid
 Supplemental Security Income (SSI)
 Waiver
 Section 8 HUD

Non-Means-Tested Resources
 Medicare
 Social Security Disability Income (SSDI)
 Private Resources
 Savings
 Investments
 Insurance
 Retirement
 Annuities
 Grants/ Scholarships
 Income

What’s the Need?
Rigidity Flexibility
Means Tested
Non-Means
Tested
Benefits Reduced
Approval Approval Waitlist Approval 2 Years Immediate Waitlist Contract
SSI Medicaid Waiver SSDI Medicare
Private
Resources Section 8 ACA

Estate Planning

Purpose of Planning
 General Planning
 Me + My Stuff
 Special Needs Planning
 Me + My Stuff + Others
What concerns you?

Purpose of Planning
 Educational
 Medical
 Social/ Recreational
 Vocational
 Residential
 Legal
 Financial
 Government benefits

Challenges of Special Needs Plan
 Providing for all loved ones without jeopardizing
means-tested benefits
 Designing a supplemental plan, not a support plan
 How to treat all children equitably
 How to establish sufficient funds for care plan
 How to provide proper supervision, management,
and distribution to child

What does a plan do?
 Marshalls assets
 Provides notice
 Gives context
 Imposes obligations
 Creates options
 Relies on experience
 Removes ambiguity
 Early investment opportunity

Who plans?
• Principal
• Beneficiary
• Power of Attorney
• Guardian
• Conservator
• Trustee
• Trust Protector
• Family
• Judge

Who plans?
Executor
Corporate or
Individual
Beneficiary
Principal
Attorney –in-
Fact
“Agent”
Trustee
Corporate or
Individual
Guardian/
Conservator

How Does a Plan Work?
 Estate Planning Inventory and Letter of Intent
 Seek Professionals
 Special Needs Estate Plan
 Funding the Plan
 Annual Review
Using the tools to build the plan.

Okay, I Need a Plan.
Now What?

No Estate Plan
 West Virginia laws of intestate distribution
 Decedent’s Spouse
 Decedent’s Children
 Decedent’s Parents
 Decedent’s Siblings
 Escheat
 Control
 Means-tested benefits
 Taxes
 Probate

Non-Special Needs Estate Plan
 Letter of Intent
 Last Will and Testament
 Durable Power of Attorney
 Medical Power of Attorney
 Living Will
 Revocable Trust
 Probate Avoidance

Special Needs Estate Plan
 Letter of Intent
 Last Will and Testament
 Durable Power of Attorney
 Medical Power of Attorney
 Living Will
 Revocable Trust
 Probate Avoidance
 Special Needs Trust/ Supplemental Trust
 Guardianship/ Conservatorship
 ABLE Account

Choosing your Trust
• Supplemental Trusts
• Special Needs Trusts

Special Needs Trusts
D4A First Party Self-Settled
• Established by parent, grandparent, guardian, court
with assets of the disabled individual
• Under 65
• Medicaid pay-back
• Needs planning
• Benefits preservation

D4C First-Party Pooled Trust
• Assets of the disabled individual
• Trust funded by individual
• Non-profit pooled trust
• Trust pay-back, then Medicaid
• Needs planning
• Benefits preservation

Third Party Special Needs Trust
• Assets of third party
• Established during life or by will
• Trustee discretion disbursement
• Trustee discretion preservation
• Dispositive provisions
• Needs planning
• Trust protector

Traditional Enlightened
 Parental care and
stewardship terminates
 Distributing assets
outright
 Disinheriting a special
needs child
 Leaving property to
another family member
with an ‘understanding’
 Parental care and
stewardship continues
 Benefits protected
 Third-party Discretionary
Trust
 Third-party Supplemental
Needs Trust
 Eligibility
 Quality of life
 Residual estate
 Third party administrator
Estate Planning Options For Families

First-Party Third-Party
• Created by parent, grandparent,
guardian or a court, with...
• Funds of beneficiary
• Benefits eligibility
• Contains ‘pay-back’ requirement
• Funding vehicle for needs planning
• Set up by third party, with...
• Funds of another
• Benefits eligibility
• No ‘payback’ requirement
• Not usually court-supervised
• Funding vehicle for needs planning
• By gift or testamentary bequest

Qualified Disability Expenses
Education and training Special dietary needs Recreation
Spending money Counseling Computers
Certain medical items Appliances Clothing
Vacations, social Dental expenses Companions
Quality of life expenses Adaptive equipment Musical
Transportation Furnishings Travel
Insurance/preneed/other Housing
Personal care items

Guardianship and Conservatorship
W. Va. Code 44A-1-1, et seq.
“Protected Person” - an adult individual, eighteen years of age or older,
who has been found by a court, because of mental impairment, to be unable to
receive and evaluate information effectively or to respond to people, events, and
environments to such an extent that the individual lacks the capacity:
(A)To meet the essential requirements for his or her health, care, safety,
habilitation, or therapeutic needs without the assistance or protection of a
guardian; or
(B)To manage property or financial affairs or to provide for his or her support of
legal dependents without the assistance or protection of a conservator.
A finding that the individual displays poor judgment, alone, is not sufficient
evidence that the individual is a protected person within the meaning of this
subsection.

Surrogate Decision-Making
“Conservator” – person appointed by the court who is
responsible for managing the estate and financial affairs of a
protected person, and where applicable, will include a
limited conservator or temporary conservator.
“Guardian” – person appointed by the court who is
responsible for the personal affairs of a protected person,
and where applicable, will include limited guardian or
temporary guardian.
Functional or categorical determination?

Initiation
Physician
statement and
financial
resources
Representation Fact finding
Appointment of
guardian and/or
conservator and scope
Conservator
and Guardian
Regular reports
Modifications
and
Revocations

“Normal” Planning
“Special Needs”
Planning
 Similar to Committee
 Can result from failure
to plan with DPOA,
Trust, MPOA, etc.
 Recognizes ability to
determine level of
guardianship- Limited
to Full Guardianship
 Provides for
successorship of
guardian

ABLE Accounts
• Achieving a Better Life Experience Act
• Savings account with tax-free earnings for health,
independence, quality of life
• Eligibility
• Disabled before age 26
• Receives SSI or SSDI
• Qualified disability expenses
• Draw backs
• Annual contribution limits
• $100,000 ceiling before SSI suspension
• Medicaid Payback

Great, how do I use an ABLE Account?
• Income
• Savings
• Avoid spend-down
• Independent control
• Trust “Band-Aid”

Where do YOU go from here?
 Estate Planning
 Coordination of Assets and Benefits
 Title XIX Waiver
 Housing
 Community Services
 Vocational Training
 IEP/ 504 Plans
 Socialization
 What else?

“Waiting is a trap. There will always be reasons to wait… The truth is, there are
only two things in life, reasons and results, and reasons simply don’t count.”
Robert Anthony
Common Misconceptions About
Special Needs Planning
1. A special needs trust is special needs
planning
2. Government benefits are enough to
support my child for their lifetime
3. I can always make decisions for my
loved one
4. Guardianship is irreversible
5. I need to have all the answers before
I start
6. My child is young… I can wait to plan
7. I don’t have enough money to even
worry about
Common Mistakes to Avoid
1. Never defined the future needs of
your loved one
2. Never set up a will or other legal
documents
3. Use Disinheritance Model
4. No special needs trust is set up
5. Never changed Beneficiary
Designations
6. Never securing your own future
7. Never made future caregiver
official
8. Don’t understand the tax system
9. Communication is absent

Top Tips When Planning for Special Needs
1. Don’t disinherit the family member with special needs
2. Carefully consider the division of assets among your
children
3. Discuss allocation of expenses and taxes in your estate
4. Choose the trustees of a special needs trust, and
guardians, carefully
5. Prepare a Letter of Intent
6. What if you become incapacitated?

7. Review the titling and beneficiary designations on all of
your assets
8. Consider using life insurance to fund a special needs trust
9. Retirement plans/IRAs not most effective method of
funding a special needs trust
10. Coordinate other relatives’ estate planning with your own
Bonus
11. Remember the person with special needs may need his or
her own estate plan, depending on ability and
determination of competency
12. Preapproval of documents
Top Tips When Planning for Special Needs

THANK YOU
Brent A. Bush, Esquire
Security National Trust Co.
Wheeling, WV
bbush@snt-wv.com
304-233-5215
Michael A. Bush, Esquire
Bowles Rice LLP
Morgantown, WV
mbush@bowlesrice.com
304-285-2500

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