If you are the parent, grandparent, sibling, or caregiver of a person with a disability, you may spend a great deal of time thinking about the future.

Who will care for your loved one if you are no longer able to? How will they pay for the things they need? Will an inheritance interfere with government benefits? Who will make financial and medical decisions if they cannot make those decisions themselves?

These are important questions—and they are exactly why special needs planning should be part of your family's estate plan.

Special needs planning is about more than creating a trust. A well-designed plan considers your loved one's financial resources, government benefits, future care, decision-making needs, and the people who will help carry out the plan.

At Morris Ratcliff Law, we help families in Tulsa and throughout Oklahoma create estate plans designed to protect a loved one's future while preserving access to important public benefits.

What Is Special Needs Planning?

Special needs planning is the process of creating a legal and financial plan for a person with a disability who may need assistance throughout their lifetime.

The goal is generally to provide additional resources and support without unnecessarily jeopardizing eligibility for needs-based government benefits.

Depending on your family's circumstances, a special needs plan may involve:

• A special needs or supplemental needs trust
• A third-party trust created by parents or other family members
• An ABLE account
• A will or revocable living trust
• Beneficiary-designation planning
• Powers of attorney
• Advance directives
• Guardianship or other decision-making arrangements
• A plan for who will serve as trustee or otherwise assist your loved one
• Instructions for future caregivers and family members

There is no single document that works for every family. The right plan depends on the individual's disability, current benefits, assets, family circumstances, and anticipated future needs.

Why Is Special Needs Planning Important?

One of the biggest mistakes families can make is assuming that leaving money directly to a person with a disability is always the simplest solution.

For someone receiving needs-based benefits, an inheritance or other assets may affect eligibility for those benefits. Oklahoma's rules regarding trusts and benefit eligibility can be complicated, and the treatment of assets depends heavily on how a trust or other arrangement is structured.

That does not mean you should avoid leaving assets to your loved one.

Instead, it means you should carefully consider how those assets will be provided.

A properly structured special needs plan can give a trustee the ability to use family assets for your loved one's benefit while taking government benefits into consideration.

What Is a Special Needs Trust?

A special needs trust is a trust designed to benefit an individual with a disability while considering the individual's eligibility for public benefits.

There are several types of special needs trusts, and the distinction between them is important.

Third-Party Special Needs Trusts

A third-party special needs trust is generally funded with assets belonging to someone other than the person with the disability.

For example, parents may create a trust for their adult child and provide that trust with assets during their lifetimes or at death.

The trust can then be used to supplement—not necessarily replace—the resources available through government programs.

This can be an important part of a parent's estate plan.

Rather than leaving an inheritance directly to a child who receives needs-based benefits, the parents may instead direct the inheritance into a properly drafted trust.

First-Party Special Needs Trusts

A first-party special needs trust is different because it generally holds assets belonging to the individual with the disability.

Federal and Oklahoma rules impose specific requirements on these trusts. For example, Oklahoma's Medicaid rules recognize an exemption for certain trusts containing the assets of a disabled individual under age 65 when the applicable requirements are satisfied.

Because these requirements can be very specific, families should not assume that simply placing assets into a document called a "special needs trust" will accomplish their goals.

What About an Oklahoma STABLE Account?

A STABLE account can also be an important part of special needs planning.

Oklahoma's OK STABLE program allows eligible individuals with qualifying disabilities to establish accounts that can be used for qualified disability expenses. Eligibility requirements apply, including requirements concerning the onset of the disability.

Qualified disability expenses can include expenses such as:

• Education
• Housing
• Transportation
• Employment training
• Assistive technology
• Health-related expenses
• Legal fees
• Financial management
• Basic living expenses

Oklahoma's rules provide specific treatment for ABLE account distributions used for qualified disability expenses.

An ABLE account and a special needs trust are not necessarily alternatives. Depending on the circumstances, a family may benefit from using both.

Special Needs Planning Is About More Than Money

Financial planning is only one part of the equation.

Parents should also think about what happens when they are no longer able to provide care themselves.

For example:

Who will help make financial decisions?

If your loved one cannot manage finances independently, your plan should address who will have authority to assist them and under what circumstances.

Who will make medical decisions?

An estate plan should address healthcare decision-making and communicate your family's wishes regarding medical care.

Who will serve as trustee?

Choosing a trustee is one of the most important decisions in a special needs plan. The trustee may have significant responsibility for managing assets and making distributions.

Where will your loved one live?

Your plan may need to account for housing, transportation, employment, education, and other long-term needs.

What happens after you are gone?

Parents often know exactly what they want for their child but have never written those wishes down. A good estate plan can give future caregivers and family members a much clearer roadmap.

What Happens If a Parent Dies Without a Special Needs Plan?

Consider a parent whose adult child receives needs-based government benefits.

The parent dies and leaves the child an inheritance through a will.

The inheritance may create an asset that affects the child's eligibility for certain benefits. The family may then have to address the problem after the parent's death—when their options may be more limited and the family is already dealing with the loss of a loved one.

Proper planning can help avoid making the family solve these problems during a crisis.

Instead, the parents can establish the appropriate planning structure while they are alive and provide clear instructions for what should happen when they die.

When Should You Begin Special Needs Planning?

There is rarely a good reason to wait.

Special needs planning can be particularly important when:

• Your child has recently been diagnosed with a disability.
• Your child is approaching adulthood.
• Your child is beginning to receive government benefits.
• You are creating or updating your estate plan.
• You have retirement accounts or life insurance that will eventually pass to your children.
• Your child has received or may receive an inheritance.
• Your family is considering guardianship or other decision-making arrangements.
• You are concerned about what will happen to your child after you are gone.

You do not have to know exactly what the next 30 years will look like before beginning the planning process.

The purpose of the plan is to create a legal framework that can adapt as your loved one's circumstances change.

Tulsa Special Needs Planning for Your Family

If you live in Tulsa, Owasso, Broken Arrow, Jenks, Bixby, or another community in the Tulsa area, special needs planning can help you prepare for both the expected and unexpected parts of your loved one's future.

At Morris Ratcliff Law, we believe estate planning should be more than receiving a stack of documents.

Your family should understand what the documents do, why they were prepared, and how they work together.

If you have a loved one with a disability, we can help you evaluate your family's circumstances and determine whether a special needs trust, ABLE account, updated estate plan, or other planning tools may be appropriate.

Planning today can give your family greater confidence about tomorrow.

Frequently Asked Questions About Tulsa Special Needs Planning

What is special needs planning?

Special needs planning is the process of creating a legal and financial plan for an individual with a disability, particularly when that person may rely on needs-based government benefits.

Does every person with a disability need a special needs trust?

No. A special needs trust is not appropriate for every individual with a disability. The need for one depends on factors such as the person's assets, benefits, family circumstances, and long-term needs.

Can a special needs trust protect government benefits?

A properly drafted and administered special needs trust may help preserve eligibility for certain needs-based benefits, but the specific requirements depend on the type of trust and the benefit program involved.

Can an ABLE account be used instead of a special needs trust?

Sometimes, but not always. ABLE accounts and special needs trusts serve different purposes and have different rules. In some situations, they can work together as part of a broader plan.

When should parents create a special needs plan?

Ideally, parents should begin planning before their child receives a significant inheritance or other assets and before a crisis occurs. However, it is never too late to have the plan reviewed by an experienced estate planning attorney.

Do I need a Tulsa estate planning attorney for special needs planning?

Because special needs planning can involve trusts, estate planning, government benefits, and decision-making authority, working with an attorney familiar with these issues can help your family avoid unintended consequences.

Talk With a Tulsa Estate Planning Attorney About Special Needs Planning

Your loved one's future deserves more than an informal promise that "the family will take care of them."

A thoughtful Tulsa special needs planning strategy can provide a framework for managing assets, preserving important benefits, choosing the right people to help, and preparing for the years ahead.

If you are ready to discuss a special needs plan for your family, contact Morris Ratcliff Law to schedule an estate planning consultation in Tulsa, Oklahoma.

Call us today!