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Preparing a Letter of Intent For Your Child With Special Needs

August 9th, 2017

By Amy C. O’Hara, CELA, Partner

No one else knows your child as well as you do, and no one ever could. You are a walking encyclopedia of your child’s history, experiences, habits, and wishes. If your child has special needs, the family’s history adds a helpful chapter to your child’s book, one detailing his unique medical, behavioral and educational requirements.

What would happen if you suddenly became unable to provide your child with the necessary supports he needs? Without you, your child would become dependent on other caregivers who simply do not possess all of your personal knowledge and insight. However, there are steps you can take now to minimize the natural disruption and disorientation that will occur upon your death or if you become unable to care for your child during your lifetime.

Littman Krooks Special Needs PlanningFirst and foremost, you should put into place supported decision making for your child to assist with personal financial and medical decisions.  Depending on your child’s functioning, this is accomplished by either appointing a legal guardian through a court proceeding or having your child execute a power of attorney and health care proxy.

Second, you should prepare a letter of intent to help loved ones and your child manage a difficult transition when you no longer are the primary caregiver. A letter of intent is an important planning tool for parents of children with special needs (including adult children), and also may be useful when planning for minor children who are not  expected to face special challenges.

Although a letter of intent can be considered one of the most important estate planning documents a parent can prepare, it is not a formal legal document that must be created by an attorney. The goal of a letter of intent is to memorialize your knowledge of your child’s needs so that you may guide future caregivers, guardians and trustees in providing the best possible care to your child. Simply put, a thoughtful letter of intent ensures that those who come after you need not waste precious time figuring out the best way to manage and care for your child.

At minimum, the letter can address the following points regarding your child: family history, daily schedule; food likes and dislikes, medical care, education, government benefits received, employment, residential environment, social environment, religious preferences, behavior management, and funeral arrangements.

Once you prepare, sign and date the letter of intent, you should review the document annually and update it as necessary. It is important that you let your child’s potential future caregiver know the letter of intent exists and where it can be accessed; even better, you can review the document with the caregiver on an annual basis. The letter of intent should be placed with all of your other relevant legal and personal documents concerning your child.

The letter of intent can be a difficult and extremely emotional document to write, as you are envisioning a time when your child is navigating this world without you. However, once it is completed, the first important step has been taken toward creating a detailed road map for future caregivers and trustees. As a parent you also may be relieved to know that you are ensuring the highest quality of life for your child by laying the foundation for as seamless a transition as possible after you are gone.

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.


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Tax Deductions & Credits for Special Needs Families

March 10th, 2017

By Amy C. O’Hara, Esq., Littman Krooks LLP

Parents of children with special needs often have unique financial concerns, and one way to ease those concerns is to reduce their tax burden.

There are many tax deductions and credits available that parents may not be aware of. Parents of children with special needs should familiarize themselves with the deductions and credits and take care to document all expenses related to their children’s medical expenses, development and therapy.

Here are 5 useful tax deductions and credits for parents of children with special needs:

Littman Krooks Special Needs Planning

1. Medical & Therapy Expenses

The first type of deduction to consider is for medical and therapy expenses. For income tax purposes, learning disabilities are a type of medical condition. This may include autism, ADHD, cerebral palsy, and other learning disabilities.

While these expenses are limited by 10 percent of adjusted gross income, the limitation may be exceeded by certain types of out-of-pocket expenses.

Such expenses can include the following:

  • Special schooling such as: tutoring that is specifically intended to address the special needs of the child.
  • Regular education when it is intended to treat the child’s special needs.
  • Aides that a child may require to benefit from education.
  • Exercise programs, if they are recommended by a medical professional.
  • Transportation to and from special schools or therapy sessions.
  • Equipment, devices and supplies necessary to treat or alleviate a medical condition, including technology items such as communication devices.

2. Specialized Foods

A gluten-free, casein-free diet can be used as a deduction provided it is medically recommended. Generally, only the additional cost of the specialized foods over and above what would be paid for similar items is deductible.

3. Legal Expenses

In some cases, legal expenses related to your child’s special needs may be deductible, for instance if you hire an attorney to help you prove that your child’s medical expenses are legitimate.

Tax Credits

Even more helpful than a tax deduction is a tax credit, which applies directly to the amount of tax you owe. The tax credits most helpful to parents of special needs children are the Child and Dependent Care Credit and the Earned Income Credit. In both cases, a credit that is normally only available for children may also be used for an older child with special needs.

4. Child and Dependent Care Credit

The Child and Dependent Care Credit may be applied when you pay someone to care for your dependent, and it provides a tax credit of up to $3,000 per dependent, to a maximum of $6,000 for two or more dependents.  Child-care, after-school programs and day camp qualify for the credit.

The credit is available for children under the age of 13, but the age limit does not apply to older children with special needs.

5. Earned Income Credit

The Earned Income Credit can also be useful for parents of children with special needs. The credit generally may be applied by families with a low to moderate income and children under the age of 19, or up to age 23 for full-time students. However, for adult children living with their parents, the age limit does not apply.

In Conclusion

Parents of children with special needs know that there are unique challenges involved, including financial hurdles. However, with careful planning and the assistance of an experienced attorney who is sensitive to special needs issues, you can make sure you do what is necessary to reduce your tax burden and protect your child’s interests.

 

Learn more about Littman Krooks services at www.littmankrooks.com or www.specialneedsnewyork.com.


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Moving to a New State When You Have a Family Member with a Disability

July 26th, 2016

Moving to another state is a big undertaking for any family, but it can be particularly complicated when a family member has a disability. The secrets to a successful transition are advance planning and a backup plan in case of problems. Here are a few specifics to keep in mind.

Know what to expect with public benefits

If your family member with a disability is receiving Social Security Disability Insurance (SSDI) benefits, there should be no disruption in payments, as long as you inform the Social Security Administration as early as possible of your change of address. Supplemental Security Income (SSI) benefits should not be disrupted either, but the amount could change. In 2016, the federal maximum SSI benefit for an individual is $733 per month. However, some states add an optional state supplement or make food stamps or other benefits available to SSI beneficiaries, so those benefits may vary by state.

Plan in advance for health care needs

Health care is a primary concern, and in this area much can change when moving to another state. In addition to finding new doctors, therapists and other service providers, you should be prepared for changes in coverage. Private health insurance policies may have different coverage or premiums in another state. If you signed up for health insurance through the Affordable Care Act state exchanges, you can take advantage of a 60-day special enrollment period, but be sure to check the eligibility requirements ahead of time. Medicare benefits should not be affected by an interstate move, but Medicaid will need to be reapproved in the new state, and the services and support available through Medicaid varies from state to state.

Special education and other services

While students with disabilities are guaranteed a free and appropriate public education by the federal Individuals with Disabilities Education Act (IDEA), a special needs student’s Individualized Education Program (IEP) will need to be renegotiated. Other services, such as day care, social programs and in-home services vary greatly from state to state. ABLE Act legislation has not yet been enacted in all 50 states, and special needs trusts should be reviewed by an attorney to ensure that they are up to date and there are no problems created by the move.

Moving to a new state is a big project, but creating a checklist and engaging in advance planning will help you have an organized approach. Even with a detailed plan, it is a good idea to have a backup plan, and an emergency fund, in case of pitfalls along the way.

 

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.


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The Family and Medical Leave Act (FMLA) includes siblings for job-protected Leave

September 21st, 2015

Siblings are included in the protections of the Family and Medical Leave Act (FMLA) in some circumstances.

Littman Kroooks Special Needs PlanningThe FMLA, enacted in 1993, provides for eligible workers to take unpaid leave for up to 12 workweeks per year because of their own serious health condition or to care for their spouse, parent or child with a serious health condition. Siblings have never been explicitly included in these protections. However, the Department of Labor Wage and Hour Division, which implements the FMLA, has clarified that siblings are protected in certain cases.

The Department has clarified the definition of “son or daughter” in two ways that benefit families who work together to care for a family member with a disability:

First, the Department has clarified that “son or daughter” includes both children under the age of 18, and adult children who are incapable of self care because of a physical or mental disability.

Second, “son or daughter” has been clarified by the Department as including individuals for whom the worker seeking leave is acting “in loco parentis,” which means “in the place of a parent.” This may include siblings who have day-to-day responsibility for caring for the child or adult with a disability.

With these detailed updates from the Department of Labor, it is clear that otherwise-eligible employees who are siblings with the day-to-day responsibility of caring for a brother or sister, including an adult brother or sister incapable of self-care due to a disability, are protected under the FMLA when they must take leave from work to care for their sibling.

 

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.


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Trusts and Your Heir with Special Needs

June 16th, 2015

Trusts are a common estate planning tool and are used to keep assets out of a probated estate or to reduce an estate tax burden. Trusts can also be used to protect one’s heirs. There are instances when it may not be in a person’s own best interests to inherit funds directly.

A direct inheritance may prove detrimental in the case of an heir with special needs. The families of individuals with special needs have often arranged their finances such that the individual will be eligible for Supplemental Security Income, Medicaid and other public benefits. These programs are needs-based, which means that if the individual’s income or assets rise above a certain level, the benefits could be lost. In a case like this, a direct inheritance could do more harm than good, and a solution may be a special needs trust or supplemental needs trust, which can be used to provide for certain supplemental needs of an individual while preserving their eligibility for benefits. Littman Krooks

In other cases, a person planning their estate may wish to consider certain circumstances in the lives of their heirs that could put an inheritance at risk. This may include a variety of situations. Some heirs may be unlikely to be able to manage money in their own best interests, due to their youth, their spending habits, or circumstances such as a substance abuse issue. There may be reasons that an heir is likely to become a defendant in a lawsuit. In other cases, if an heir divorces, then the divorced spouse may claim a share of assets inherited directly. In the case of a second marriage when there are children from a prior marriage, a person planning their estate may wish to ensure that their grandchildren are provided for, not their child’s second spouse.

A qualified estate planning attorney can design an asset protection trust or spendthrift trust to protect your family’s assets against such risks. The details of the trust and its power to protect assets depend on individual circumstances and state and federal law. Generally, a trust can be used to restrict a beneficiary’s ability to assign his or her interest in the trust to another person and restrict the rights of creditors to reach the assets of the trust. However, it is important to recognize that, depending on applicable law, the trust assets may be able to be reached to satisfy certain obligations, such as child support or taxes. To learn more, meet with an estate planning attorney at Littman Krooks.

 

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.


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Special Needs Expos

March 12th, 2015

special needs expos

Earlier this year, we interviewed Heather Rogoff Angstreich, Founder/Partner, Special Needs Expos about the upcoming year and events they are holding in 2015. Here’s what she had to say:

  1. Why did you create special needs expos? 

All I wanted to do was help other parents and children who were in my shoes. My son, (who is now 10 years old), was diagnosed with Autism when he was two years old.  I attended a small special needs resource fair when he was first diagnosed and found it incredibly helpful.  I love helping people so, when I got laid off, I started Special Needs for Special Kids, a printed special needs resource guide that I distributed across Long Island. I met my partners (Scott and Jamie) through this publication; they became clients. They knew I started the publication because I wanted to help other parents who needed guidance and resources to navigate the world of special needs here in Long Island.  Scott suggested that I should take the publication to another level and we thought we would do a small resource fair at a local JCC to bring some special needs resources together for a one-time event.  Scott and Jamie were no strangers to the special needs community either; they had a close family member who inspired them to get involved.

  1. How did you begin this endeavor?

We looked for a venue to hold this little resource fair and ended up booking a much larger space at a local hotel.  We went from one end of the spectrum to the other and kept our fingers crossed that we would be able to fill the space. Our first expo was geared more towards children with special needs, but we did have resources that catered to the adult population too.  Our goal was to have each person that entered the doors to walk out with at least one piece of useful information that day. We estimated that 2500 to 3000 people walked through the doors that day.

  1. What locations are you expanding to in 2015? IMG_20140914_110443493_HDR

Long Island is our “flagship” expo and will be held on April 26th at the Long Island Hilton. The Special Needs Expo – Westchester will be back on November 8, 2015 at the Westchester Marriott and the Special Needs Expo – New Jersey (northern) will also be back on September 27, 2015 at the Glenpointe Marriott in Teaneck. We hope to expand to Philadelphia in 2016.

  1. How does your expo help educate people to advocate for themselves and their family members?

Our expos have a variety of special needs resources, products, services, presentations and demonstrations.  We want people to take advantage of all the exhibitors that have come out.  They are there to answer questions, give support and ideas.  If a person meets the right connection, it can change things for them and/or their loved one.

  1. What makes your expo different from other special needs resource fairs in the area?

Our expos are always free to attend and child-friendly (games and/or inflatables and face painting are provided at no cost to the attendee). We offer a wide variety of resources, presentations and demonstrations. We have a quiet room for those that might need to take a break, if they are too overwhelmed. We want to connect these amazing resources with the individuals, families, caregivers and professionals to help make the journey a little less difficult.  Our Long Island events have connected over 300 exhibitors to 5000 attendees in the last two years.  Westchester and NJ events are also growing and we have heard from many of our FB and website followers that the need is there for this service.

  1. How do can people find more info about your expos? How do vendors register for an exhibit?

We have a Facebook page: https://www.facebook.com/SpecialNeedsExpos and our official website URL is www.specialneedsexpos.com.There is a tab for attendees to register and a separate one for exhibitors to register and receive more information.  To contact us directly, email us at info@specialneedsexpos.com or call us at 516-279-3727.

 

Learn more about Littman Krooks services at www.littmankrooks.com or www.specialneedsnewyork.com.


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Special Needs Trusts: How Much Trouble Are They to Manage?

December 15th, 2014

By Bernard A. Krooks, Certified Elder Law Attorney®

A client recently asked the following question: I’m thinking about setting up a special needs trust for my son, who has a developmental disability. Will it mean a lot more work for my daughter, who will be handling my estate?

It’s a fair question, and one we hear a lot. No one ever asks: “could you please give us the most complicated estate plan possible?” Just about everyone wants things as simple as they can be.

When you think about providing an inheritance for your child — or anyone, for that matter — with a disability, there are some realities you just have to deal with. Those realities almost always lead to the same conclusion: a special needs trust is probably the right answer. There are a number of answers to the “can’t we keep it simpler?” question:

In most cases there’s going to be a trust, whether you set it up or not. If you leave money outright to a person with special needs, someone is probably going to have to transfer that inheritance to a trust in order to allow them to continue to receive public benefits. The trust set up after your death will be what’s called a “first-party” (or “self-settled”) trust, and the rules governing its use will be more restrictive. There will also have to be a “pay-back” provision for state Medicaid benefits when your son dies — so you will lose control over who receives the money you could have set aside. Even if no trust is set up, there is a high likelihood that your son will (because of his disability) require appointment of a guardian. The cost, loss of family control and interference by the legal system will consume a significant part of the inheritance you leave and frustrate those who are caring for your son. If you prepare a special needs trust now it sidesteps those limitations.

The trust you set up will not be that complicated to manage. People often overestimate the difficulty of handling a trust. Yes, there are tax returns to file, and possible accounting requirements. Neither is that complicated; neither is anywhere near as expensive as the likely costs of not creating a special needs trust. In any event, your daughter can hire experts to handle anything that she finds difficult. There are lawyers, accountants, care managers and even trust administrators who can take care of the heavy lifting for your daughter — or whomever you name as trustee. The costs can be paid out of the trust itself, so she will not be using her portion of the inheritance you leave, or her own money. Yes, they add an expense — but they can actually help improve the quality of life for both your daughter the trustee and your son with a disability.

Your daughter does not have to be the trustee at all. We frequently counsel clients to name someone else — a bank trust department, a trusted professional, or a different family member — as trustee. That lets your daughter take the role in your son’s life that she’s really better suited for: sister. If it is right for your circumstance, you might even consider naming her as “trust protector.” That could allow her, for instance, to receive trust accountings and follow up with the trustee, or even to change trustees if the named trustee is unresponsive, or too expensive, or just annoying. Trusts are wonderfully flexible planning devices — but that does mean you have to do the planning.

If your son’s condition improves, or he no longer requires public benefits, the trust can accommodate those changes. Depending on your son’s actual condition and the availability of other resources, you might reasonably hope that he will not need a special needs trust — or at least might not need one for the rest of his life. The good news: your special needs trust will be flexible enough to allow for the use of his inheritance as if there were no special needs. The bad news: that is only true if you set up the trust terms yourself — the trust that will be created for him if you do not plan will not have that flexibility.

Simply disinheriting your son probably is not a good plan. Sometimes clients express concern about the costs and what they perceive as complicated administrative and eligibility issues and they decide to just leave everything to the children who do not have disabilities. “My daughter will understand that she has to take care of my son,” clients tell us. That’s fine, and it might well work. But do you feel the same way about your daughter’s husband? What about the grandkids and step-grandkids who would inherit “your” money if both your daughter and her husband were to die before your son (the one with the disability)? What about the possibility of divorce or creditors’ claims against your daughter, or even bankruptcy? Most of our clients quickly recognize that disinheriting the child with a disability is not really a good planning technique.

But who knows what the public benefits system, the medical care available, or my son’s condition might look like twenty years from now? Indeed. That’s exactly why the trust is so important.

What does that mean for your planning? If you have a child, spouse or other family member with special needs — OR if you have a loved one who may have special needs in the future — your plan should include an appropriate trust. The cost is relatively small, and the benefits are significant. In fact, the cost of not doing anything is probably higher – and the opportunity loss from failing to plan is especially high. While doing special needs planning the right way necessarily involves going to a lawyer, it’s relatively easy to find one who specializes in this area of law.

 

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Structuring the Trust Fund

December 3rd, 2014

Trust funds allow parents and grandparents to ensure that children receive their inheritance slowly over time, rather than receiving it all at once at the age of 18. There are many factors to consider when creating a trust fund, but the impact of the trust on the beneficiaries is one of the most important considerations.

Structuring a trust is an individual process, and should be done with an appreciation for the family’s unique situation. For example, many people in their late teens do not have the responsibility or knowledge to handle a large inheritance, and their personal growth and achievement may be hindered by a windfall of cash. In addition, some teens go directly to college after turning 18, while others take a different path.

One common way to structure a trust fund with a large amount of money is to allow the trustee, who is in charge of managing the trust, to distribute it in three parts: the first when the child graduates from college, the second in the child’s mid-20s, and the final distribution when the child is in his or her early 30s. Until the trust is fully distributed, the trustee can apply it to the beneficiary’s education, healthcare and other expenses as outlined in the trust.

Placing heavy restrictions on a trust can be detrimental in many cases, especially as the beneficiaries get older. Although teenagers may be impulsive, parents and grandparents should trust that after a certain point, they will have the maturity to manage the money. Similarly, secrecy about the value and nature of the trust can cause beneficiaries to feel powerless and even resentful.

A skilled estate planning attorney can help individuals develop a trust that is in alignment with their wishes and the beneficiaries’ best interests.

 

Learn more about our transition planning services by visiting www.specialneedsnewyork.com.


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Inheritance: When a Child Has a Developmental Disability

June 16th, 2014

As a child with developmental disabilities grows older, parents begin thinking about how to secure their loved one’s financial future as the care they need can be expensive. While government programs and community resources provide essential help, significant family resources are often needed as well. Planning an inheritance for a child with a developmental disability requires special considerations. Here’s why:

A direct gift or bequest may not be appropriate, for two major reasons:

  1. The individual may not be capable of managing significant assets without assistance;
  2. It may be necessary to maintain eligibility for government programs that have income and asset limits

One alternative to a direct gift is making a gift to a family member, such as a sibling, who can  be trusted to use the assets in the best interests of the individual with a disability. However, the family member must be willing and able to take on that responsibility and the gift would then become part of his or her estate, leaving it open to be lost in a divorce or claimed by creditors.

Another alternative is a special needs trust, which can help the individual with special needs maintain eligibility for government programs, while making funds available to enhance his or her quality of life. Creating a special needs trust is a complex task that should be done with the assistance of an estate planning attorney, experienced with special needs issues.


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Financial Benefits Designed to Support Families Who Have Children with Special Needs

May 23rd, 2014

It is of the utmost importance that families with special needs take full advantage of benefits that are available from the government and the community. Sometimes families resist accepting these benefits out of a belief that they are only intended for low-income families. While there are income and asset requirements for some programs, your family should take advantage of any benefits you are eligible for, as it is in your interests and actually honors the intent of the programs.

Raising kids is expensive, and families with children who have special needs may have additional costs, such as medical expenses, therapy, modifications to a home or vehicle, and adapted recreation or child care. The costs may seem daunting, but they are easier to handle with proper financial planning.

A special needs trust is one of the most important financial tools to consider for a special needs child. This type of trust allows you to set money aside, or receive it as a gift from a family member or settlement from insurance, without worrying that it will affect the child’s eligibility for public benefits such as Supplemental Security Income (SSI) or Medicaid.

In addition to a special needs trust, building your family’s personal savings is even more important than it is for most families. You may have to pay for therapy or other treatments. Even if you believe that certain services should be covered by insurance or provided by your school district, resources may be required to advocate for the right to those services. In addition to services needed during childhood, families will want to plan for their child’s adulthood. Once public education and its attendant benefits are no longer available, the question of where the adult with special needs will live and what he or she will do becomes paramount. Proper financial planning done as early as possible will make this process much easier, and a financial adviser can be extremely helpful in creating that plan.

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