Special Needs Planning in Wauwatosa, Pewaukee, Shorewood and Milwaukee
For families caring for a loved one with a disability, the future can be both hopeful and uncertain. Public benefits like Supplemental Security Income (SSI) and Medicaid provide important support, but they come with strict limits on income and assets. This means that even a small inheritance or financial gift can threaten eligibility. This is why special needs planning is not just helpful, it’s essential.
At Collins Law Firm, we specialize in helping families in Wauwatosa, Pewaukee, Shorewood and surrounding communities including Whitefish Bay, Fox Point, Mequon, Cedarburg and Greendale create thoughtful and legally sound plans to protect their loved ones’ access to government benefits and enhance their quality of life for years to come.
What Is Special Needs Planning?
Special needs planning is an area of estate planning that focuses on the long-term care, financial security, and well-being of individuals with physical, intellectual, or developmental disabilities. The aim is to ensure that your loved one has everything they need to lead a fulfilling life without losing access to important public benefits.
This type of planning goes beyond traditional wills and trusts. It requires a deep understanding of complex federal and state benefit regulations, as well as a vision for future caregiving, housing options, and daily support services. At Collins Law Firm, we combine our legal expertise with our genuine compassion to create plans that reflect your family’s values and the unique circumstances of your loved one.
The Role of the Special Needs Trust
At the heart of many special needs plans is the Special Needs Trust (SNT), a powerful legal instrument designed to hold and manage assets on behalf of individuals with disabilities while ensuring they remain eligible for SSI, Medicaid, and other means-tested benefits.
Unlike a standard inheritance or custodial account, the funds in a SNT (Special Needs Trust) are not counted as part of the beneficiary’s assets when determining their eligibility for benefits. Instead, these funds can be used to cover supplemental expenses that enhance the quality of life of the individual with special needs. These expenses can include:
- Educational programs and vocational training
- Therapies and medical equipment that are not covered by insurance
- Recreational activities, travel, and social engagement
- Personal care attendants or home modifications
- Technology, clothing, and other comfort items
Importantly, the trust cannot be used for essential living expenses such as food and rent, as doing so would reduce Social Security Income (SSI) payments. However, it can help fill gaps left by government programs.
Types of Special Needs Trusts
There are two main types of SNTs, and choosing the right one depends on the source of funds and your family’s goals:
1. Third-Party Special Needs Trust
This trust is funded with assets that are not owned by the beneficiary. Typically, these assets come from parents, grandparents, or other family members. The trust is often established as part of a long-term planning process and can be set up during the person’s lifetime (as a separate trust) or after death (through a will or revocable trust).
Advantages include:
- No need to repay the government after the beneficiary’s death
- Greater flexibility in how the funds are used
- Can be managed by a trusted family member or professional trustee
2. First-Party (Self-Settled) Special Needs Trust
This trust is funded by the beneficiary’s own assets, such as an inheritance, personal injury settlement, or savings. Because these funds belong to the individual, federal law requires that any remaining balance at the beneficiary’s death be used to repay the state for Medicaid expenses.
These trusts must be created by a parent, grandparent, legal guardian, or the court – and they must comply with strict federal regulations. Our attorneys ensure every detail meets current legal requirements to ensure eligibility for benefits.
Choosing the Right Trustee
One of the most important decisions in planning for special needs is selecting a trustee – the person or organization responsible for managing the trust and making decisions in the beneficiary’s best interests. This role requires financial responsibility, emotional understanding, and thorough knowledge of the beneficiaries’ needs.
Options include:
- A trusted family member (with proper guidance and supervision)
- A corporate trustee, such as a bank or trust company
- A combination of both, with co-trustees
At Collins Law Firm, we can help you explore these options and even create detailed letters of intent to guide the trustee in your loved one’s routine, preferences, medical history, and long-term goals, ensuring continuity of care even if you are no longer able to provide it.
Beyond the Trust: A Holistic Approach
While the Special Needs Trust is a central part of the planning process, it also includes other important considerations. These include:
- Guardianship or conservatorship planning, if decision-making assistance is needed
- Updating beneficiary designations for life insurance and retirement accounts
- Coordinating with other estate planning documents, such as wills and powers of attorney
- Connecting families with local resources, including care coordinators, advocacy groups, and housing programs
We take a holistic approach, ensuring that every aspect of your plan works seamlessly together to support the present and future needs of your loved one.
Serving Wisconsin Families with Expertise and Heart
Collins Law Firm understands that planning for special needs is not just about legal documents. It’s about love, legacy, and long-term security. We have helped countless families in Southeastern Wisconsin to create plans that provide peace of mind, ensuring that their loved ones will always be cared for with dignity and respect.
Our attorneys stay up-to-date with the latest laws, benefit regulations, and planning strategies, so you don’t have to navigate this complex area alone. Whether you’re just starting to explore your options or need to update your existing plan, we’re here to help you with clarity and understanding.
Complimentary Estate Planning Workshops
Contact Collins Law Firm for Special Needs Planning
For families in Wisconsin, special needs planning is a vital step in securing the future of a loved one with disabilities. We are here to provide expert guidance in setting up Special Needs Trusts and addressing all aspects of special needs planning. Contact us today to discuss how we can assist you in creating a plan that meets your family’s unique needs and ensures a stable and fulfilling future for your loved one.
Common Special Needs Planning FAQs
A Special Needs Trust (SNT) is a legal tool designed to protect an individual with disabilities’ eligibility for vital means-tested government benefits, such as Supplemental Security Income (SSI) and Medicaid, while providing supplemental resources to enhance their quality of life. The trust funds are used to pay for expenses not covered by public benefits—like personal care attendants, therapies, education, transportation, recreational activities, and adaptive equipment—without disqualifying the beneficiary from receiving essential public aid.
The key difference is the source of the funds and the rules that apply. A First-Party SNT (or “self-settled” trust) is funded with assets belonging to the individual with a disability, such as an inheritance, legal settlement, or accumulated savings. These trusts are subject to strict federal rules and, upon the beneficiary’s passing, may require remaining funds to reimburse the state for Medicaid benefits paid. A Third-Party SNT is funded with assets belonging to someone else (like parents or grandparents) for the benefit of the individual with a disability. These trusts offer more flexibility and typically have no requirement to pay back the state, allowing remaining funds to pass to other family members.
Leaving assets directly—whether through a will, joint account, or life insurance beneficiary designation—can jeopardize your loved one’s financial security. An outright inheritance or gift can push their countable resources over the very low asset limit ($2,000 for an individual) required for SSI and Medicaid. This could result in a sudden loss of critical benefits, forcing the inheritance to be “spent down” on basic care costs before benefits can resume. A properly drafted SNT holds the assets for their benefit without counting as their direct resource.
The trustee is the individual or entity responsible for managing the trust’s assets and making distributions for the beneficiary’s benefit. This is a significant fiduciary role requiring financial prudence, understanding of public benefit rules, and a deep commitment to the beneficiary’s well-being. You might appoint a trusted family member, a professional fiduciary, or a corporate trustee (like a bank). Often, a combination (a co-trustee arrangement) works best. We help you evaluate candidates and ensure the trust document provides clear guidance for their discretionary powers and duties.
No, these address two separate legal needs. A Special Needs Trust manages financial assets for an individual’s benefit. A guardianship (or conservatorship) is a court proceeding that grants someone (the guardian) the legal authority to make personal and/or financial decisions for an adult deemed incapacitated. Even with a well-funded SNT, a guardian may still be necessary to make daily healthcare, residential, or other life decisions if the individual cannot do so independently. Part of our planning includes discussing these options and helping you navigate potential guardianship proceedings.
The ideal time to plan is as early as possible. For third-party trusts, parents should integrate them into their core estate plan when they create their wills, regardless of the child’s current age. Proactive planning ensures seamless protection if something happens to the parents. For first-party trusts, they must often be created before the beneficiary turns 65 or when they come into assets (like a settlement or inheritance) that would otherwise disqualify them from benefits. It is never too early to start this critical planning conversation.