If you have a loved one with disabilities or special needs, you will want to think about meeting their long-term needs, even after you have passed away. That is why special needs planning is important to your estate plan. With that, you need to consider this process’s legal, financial, and support aspects. Here is a look at our guide to special needs planning in Wisconsin.
What Does a Plan Require?
In these cases, you need to focus on your loved one’s care, especially when it involves their financial needs. With special needs trusts, you can help them get the assistance they need without impacting their eligibility for government benefits. A Special Needs Trust (SNT) allows funds to be used for supplemental needs without disqualifying individuals from benefiting from programs like Medicaid and Social Security Income.
There are several types of these trusts in Wisconsin. They include:
- First-Party SNT (Self-Settled): These trusts are funded with the beneficiary’s own assets. Many times, this can include money from a personal injury settlement or inheritance. However, these trusts must have provisions to repay Medicaid upon the beneficiary’s death.
- Third-Party SNT: These trusts can be established by someone other than the beneficiary, such as parents or grandparents. Unlike first-party SNTs, there is no requirement to repay Medicaid benefits after the beneficiary’s death.
- Pooled Trusts: These trusts are slightly different. They are managed by nonprofit organizations. In turn, they pool funds from multiple individuals. These trusts provide the most benefits for those who cannot afford to set up a private SNT.
How to Set Up a Special Needs Trust in Wisconsin?
If you want to establish a first- or third-party special needs trust, you need to meet a few requirements. First, you need to make sure that the trust document complies with state laws. Along with that, you need to select a trustee. This individual will manage the trust and make distributions.
Will you have to make special arrangements for guardianship? With these legal arrangements, an individual or guardian is appointed to make decisions for someone who is unable to make them independently. Many times, these guardians are needed when individuals have severe disabilities and cannot manage their own affairs. If that applies to your loved one, then you need to designate someone for those responsibilities. After they have been assigned, the guardian will have the legal authority to make decisions regarding the ward’s health, finances, and personal affairs.
What Other Government Benefits Are Available?
A person with special needs may qualify for a few government programs. One is Supplemental Security Income. This program provides financial assistance to individuals with disabilities who have limited income and resources. Eligibility can be a concern since there are limitations on assets. For that reason, you will want to have a well-structured SNT to maintain eligibility.
Along with that, you may want to look into Medicaid programs. These assistance programs give health coverage to low-income individuals with disabilities. In Wisconsin, Medicaid has a waiver program that can offer additional services and support. A SNT can ensure that their eligibility for Medicaid remains intact.
In Wisconsin, you might qualify for Medicaid waivers, including the Children’s Long-Term Support (CLTS) Waiver and the IRIS (Include, Respect, I Self-Direct) Program. These programs can give additional support to individuals with disabilities.
What Is an ABLE Account?
The Achieving a Better Life Experience (ABLE) account allows individuals with disabilities to save money for qualified expenses. Wisconsin offers ABLE accounts through the state’s ABLE program. Families can set up an account to manage savings for their loved one’s disability-related expenses, with certain tax benefits and contribution limits.
Discover More Options for Special Needs Planning.
With this guide for special needs planning in Wisconsin, we hope that you have a better understanding of the state’s options. However, determining which option is the best for your family can be challenging. For that reason, you may want to schedule a consultation with our estate planning team.
At the Collins Law Firm, we offer estate planning, estate administration, business law, and elder law services. We proudly serve Southeastern Wisconsin and the Milwaukee area. Contact us or call (414) 207-6292. Schedule your free and confidential consultation today!