by Thomas D. Begley, Jr., CELA

There are five ways to pay for long-term care:

• Private Pay. The patient or resident simply signs a monthly check.

• Long-Term Care Insurance. Long-term care insurance is the best way to pay for long-term care, but only about 8% of the American population has long-term care insurance. Once someone has a diagnosis of Alzheimer’s, they will no longer be medically eligible for long-term care insurance. Financial Advisors and Attorneys should encourage their clients to purchase long-term care insurance while they are in their 50s. The premiums are less expensive and the client is likely to pass medical underwriting at that time.

• Medicare. Medicare pays very little for Alzheimer’s patients because Medicare only pays for skilled care. Generally, Alzheimer’s patients only require custodial care.

• Veterans Benefits. Certain Veterans and spouses of those Veterans are eligible for Veterans benefits that include federal VA nursing homes, Veterans Aid and Attendance benefits, and state VA benefits. Veterans Aid and Attendance is a monthly check that varies depending on family situation and financial situation as well as the type of service performed by the Veteran.

• Medicaid pays for 40% of long-term care in the United States. Basically, there are four tests for Medicaid eligibility: (1) a medical test, (2) income, (3) transfer of asset test, and (4) resource limits. There is a five-year lookback for Medicaid transfer of assets, so planning should be done long in advance.

THE FUTURE OF SPECIAL NEEDS PLANNING

by Thomas D. Begley, Jr., CELA

Special needs planning is a process of planning for the legal, personal, and financial needs of an individual with disabilities to enhance the quality of life of that person to allow them to reach their full potential.  It is interesting to examine the historical treatment of persons with disabilities.  In the pre-1700s, persons with disabilities were viewed as “possessed by the devil” and they were tortured, burned at the stake, and left to die.  Between the 1800s and 1920s, these individuals were viewed as genetically defective, inferior, hidden away, and displayed as freaks and beggars.  Between 1930 and 1940, they were viewed as genetically defective, polluting the race—institutionalized, sterilized, exterminated, and the subject of eugenics. From 1940 to 1970, there were usually viewed as unfortunate objects of pity, and were institutionalized with a view toward rehabilitation.  From the 1970s to the 2000s, individuals with disabilities are viewed as independent and self-determined.  The goal is for them to live independently, to provide civil rights, and to mainstream them into society.

Planning begins by examining unmet needs including whether the person needs a monthly income, is there a current need for advocacy, are health care needs being met, is there a change or loss in benefits, does the person have a satisfactory living arrangement, and are parents taking advantage of respite care.

Good planning involves team building.  The Special Needs Team should include individuals who are compassionate and who are experienced in the needs of individuals with disabilities.  Frequently, these team members have family members with disabilities themselves.  Members of the team should include an Attorney, a Life Care Planner, Financial Advisors, Care Managers, Caregivers, Benefit Counselors, and competent Trustees.  In cases involving a Third-Party Special Needs Trust where a parent is establishing a trust for a child with disabilities, the Attorney is often the first point of contact and is responsible for assembling the team.  A critical component is the Life Care Plan.  The family meets with the Life Care Planner and determines the lifestyle they would like to have for the child with disabilities after the parents are gone.  The Life Care Planner then determines the cost of each component of the plan.  Once the cost has been determined, Financial Advisors are brought in to determine how the parents can achieve that lifestyle.  In most cases, the solution is a second-to-die life insurance policy on the parents that would be payable to a Special Needs Trust on the death of the surviving parent.  After the parents have died, it is important to engage the services of a Care Manager to do an assessment of the individual with disabilities and develop a Care Plan based on the Life Care Plan initially developed by the parents in conjunction with the Life Care Planner.  The Care Manager hires Caregivers, supervises them, monitors the plan, and makes adjustments as required.  A Benefit Counselor, in some instances the Attorney, is responsible for obtaining whatever public benefits are available to stretch needed dollars for the benefit of the individual with disabilities.  It is important that the Attorney and the Client view the Attorney as more than a document generator but, more accurately, as the team leader who is building a team to achieve the goals that the parents establish for their child with disabilities.  The Attorney must be networked with local resources such as not-for-profits and trustees.  It is also important for the attorney to have strong relationships with Social Security and Medicaid.

The practitioner’s planning tools usually include a Third-Party Special Needs Trust, a Letter of Intent (updated on a regular basis), and the Special Needs Team.

In the future many changes will occur including different types of persons with different disabilities.  Many persons with disabilities are aging at a fast rate.  It will be even more important to keep abreast of legal, medical, and technological advances.  Special Needs Trusts may become commoditized, but Special Needs Planning will not.  The number of persons with disabilities is increasing.  In 2004, the U.S. Census Bureau estimated it was one in seven people; in 2010 the Bureau estimated it was one in five.  The population age 65 and older is predicted to double from 35 million to 70 million by 2030.  The population of people age 21 to 64 with disabilities is 20 million, which equals 12.1% of the population.  Under age 15, 5.2 million individuals have disabilities.  Roughly half of those are severe, according to the U.S. Census Bureau.  It is predicted that individuals with disabilities will grow substantially in the next twenty to thirty years because of the aging of baby boomers, Autism and returning combat veterans.  Because of medical advances, there may be fewer people with developmental disabilities such as Down Syndrome, Cerebral Palsy, and related conditions, but there may be more Americans with voluntary disabilities such as obesity and drug and alcohol addiction.  Voluntary disabilities may not be covered by government benefits in the future.  Because of medical advances, there is a higher survival rate of pre-mature birth babies.  Also, individuals with disabilities are outliving life expectancy, because of medical advances.  However, they are experiencing age-related issues at a much younger age.  It is likely that aging individuals with disabilities will develop secondary conditions such as Depression, Arthritis, Chronic Pain, Pressure Sores, Fatigue, etc., which may cause a loss of independence.  Genetic testing is now available that will not only determine whether an individual has Down Syndrome or Spina Bifida, but also a whole range of conditions.  It is anticipated that in the very near future genetic testing will be able to identify conditions such as eye and hair color, predisposition of an A-type personality, predisposition of Alzheimer’s or Dementia, and possibly sexual orientation.  Genetic testing may cover conditions such as the immune system, general health, cardiovascular conditions, aging, and Cancers.  The question is whether genetic testing will cause an increase in abortions.  This will raise the ethical question of whether such testing is desirable.

One of the fastest growing disabilities is Autism.  Nationally one of every 50 children is diagnosed with a condition on the Autism Spectrum.  The increase is partially due to the evolving definition of Autism.  Causes are not really known, but theories include environmental, vaccines, age of parents, and food such as glutens, MSG, Casein, dyes, etc.  There is no cure for Autism.  The possible passage of the Able Act and the implementation of the KISS Trust will tend to commoditize Special Needs Trusts.  However, they do not commoditize Special Needs Planning.  It is important for an Attorney to distinguish himself or herself as a Planner, not a document drafter.

Special needs planning is a process of planning for the legal, personal, and financial needs of an individual with disabilities to enhance the quality of life of that person to allow them to reach their full potential.  It is interesting to examine the historical treatment of persons with disabilities.  In the pre-1700s, persons with disabilities were viewed as “possessed by the devil” and they were tortured, burned at the stake, and left to die.  Between the 1800s and 1920s, these individuals were viewed as genetically defective, inferior, hidden away, and displayed as freaks and beggars.  Between 1930 and 1940, they were viewed as genetically defective, polluting the race—institutionalized, sterilized, exterminated, and the subject of eugenics. From 1940 to 1970, there were usually viewed as unfortunate objects of pity, and were institutionalized with a view toward rehabilitation.  From the 1970s to the 2000s, individuals with disabilities are viewed as independent and self-determined.  The goal is for them to live independently, to provide civil rights, and to mainstream them into society.

Planning begins by examining unmet needs including whether the person needs a monthly income, is there a current need for advocacy, are health care needs being met, is there a change or loss in benefits, does the person have a satisfactory living arrangement, and are parents taking advantage of respite care.

Good planning involves team building.  The Special Needs Team should include individuals who are compassionate and who are experienced in the needs of individuals with disabilities.  Frequently, these team members have family members with disabilities themselves.  Members of the team should include an Attorney, a Life Care Planner, Financial Advisors, Care Managers, Caregivers, Benefit Counselors, and competent Trustees.  In cases involving a Third-Party Special Needs Trust where a parent is establishing a trust for a child with disabilities, the Attorney is often the first point of contact and is responsible for assembling the team.  A critical component is the Life Care Plan.  The family meets with the Life Care Planner and determines the lifestyle they would like to have for the child with disabilities after the parents are gone.  The Life Care Planner then determines the cost of each component of the plan.  Once the cost has been determined, Financial Advisors are brought in to determine how the parents can achieve that lifestyle.  In most cases, the solution is a second-to-die life insurance policy on the parents that would be payable to a Special Needs Trust on the death of the surviving parent.  After the parents have died, it is important to engage the services of a Care Manager to do an assessment of the individual with disabilities and develop a Care Plan based on the Life Care Plan initially developed by the parents in conjunction with the Life Care Planner.  The Care Manager hires Caregivers, supervises them, monitors the plan, and makes adjustments as required.  A Benefit Counselor, in some instances the Attorney, is responsible for obtaining whatever public benefits are available to stretch needed dollars for the benefit of the individual with disabilities.  It is important that the Attorney and the Client view the Attorney as more than a document generator but, more accurately, as the team leader who is building a team to achieve the goals that the parents establish for their child with disabilities.  The Attorney must be networked with local resources such as not-for-profits and trustees.  It is also important for the attorney to have strong relationships with Social Security and Medicaid.

The practitioner’s planning tools usually include a Third-Party Special Needs Trust, a Letter of Intent (updated on a regular basis), and the Special Needs Team.

In the future many changes will occur including different types of persons with different disabilities.  Many persons with disabilities are aging at a fast rate.  It will be even more important to keep abreast of legal, medical, and technological advances.  Special Needs Trusts may become commoditized, but Special Needs Planning will not.  The number of persons with disabilities is increasing.  In 2004, the U.S. Census Bureau estimated it was one in seven people; in 2010 the Bureau estimated it was one in five.  The population age 65 and older is predicted to double from 35 million to 70 million by 2030.  The population of people age 21 to 64 with disabilities is 20 million, which equals 12.1% of the population.  Under age 15, 5.2 million individuals have disabilities.  Roughly half of those are severe, according to the U.S. Census Bureau.  It is predicted that individuals with disabilities will grow substantially in the next twenty to thirty years because of the aging of baby boomers, Autism and returning combat veterans.  Because of medical advances, there may be fewer people with developmental disabilities such as Down Syndrome, Cerebral Palsy, and related conditions, but there may be more Americans with voluntary disabilities such as obesity and drug and alcohol addiction.  Voluntary disabilities may not be covered by government benefits in the future.  Because of medical advances, there is a higher survival rate of pre-mature birth babies.  Also, individuals with disabilities are outliving life expectancy, because of medical advances.  However, they are experiencing age-related issues at a much younger age.  It is likely that aging individuals with disabilities will develop secondary conditions such as Depression, Arthritis, Chronic Pain, Pressure Sores, Fatigue, etc., which may cause a loss of independence.  Genetic testing is now available that will not only determine whether an individual has Down Syndrome or Spina Bifida, but also a whole range of conditions.  It is anticipated that in the very near future genetic testing will be able to identify conditions such as eye and hair color, predisposition of an A-type personality, predisposition of Alzheimer’s or Dementia, and possibly sexual orientation.  Genetic testing may cover conditions such as the immune system, general health, cardiovascular conditions, aging, and Cancers.  The question is whether genetic testing will cause an increase in abortions.  This will raise the ethical question of whether such testing is desirable.

One of the fastest growing disabilities is Autism.  Nationally one of every 50 children is diagnosed with a condition on the Autism Spectrum.  The increase is partially due to the evolving definition of Autism.  Causes are not really known, but theories include environmental, vaccines, age of parents, and food such as glutens, MSG, Casein, dyes, etc.  There is no cure for Autism.  The possible passage of the Able Act and the implementation of the KISS Trust will tend to commoditize Special Needs Trusts.  However, they do not commoditize Special Needs Planning.  It is important for an Attorney to distinguish himself or herself as a Planner, not a document drafter.