Special Needs Planning Amanda E Tarzwell Esq Law

Special Needs Planning Amanda E. Tarzwell, Esq. Law Office of Gayle F. Tarzwell Wakefield, RI Copyright Amanda E. Tarzwell 2012

My Sister Allison Copyright Amanda E. Tarzwell 2012

Special Needs Planning • Guardianships (and their alternatives) • Special Needs Trusts Copyright Amanda E. Tarzwell 2012

Guardianships • Upon finding that an individual lacks capacity, the probate court appoints a competent person (guardian) to make decisions on behalf of the individual (ward). • Guardian becomes substitute decisionmaker for the ward in any or all areas that ward lacks capacity • 4 areas: – – Health Care Finances Residence i. e. where the person lives Associations/Relationships Copyright Amanda E. Tarzwell 2012

Because a guardianship deprives a person of his or her civil rights, the court must find that no lesser restrictive alternative exists. It is also important for parents to consider whether a guardianship is truly necessary. Copyright Amanda E. Tarzwell 2012

Lesser Restrictive Alternatives • Representative Payee (SSI, SSDI, Medicaid) • Property Power of Attorney • Health Care Power of Attorney • Trusts Copyright Amanda E. Tarzwell 2012

Guardianship vs. Power of Attorney Guardianship Power of Attorney • Court Supervised • • – Yearly accountings • • Public Expensive DMAT required Terminates person’s rights No Court Supervision Private No DMAT Individual must have capacity to understand document • “Adds” to person’s rights Copyright Amanda E. Tarzwell 2012

Other Resources on Guardianships and Their Alternatives Rhode Island Disability Law Center http: //www. ridlc. org/publications/Guardianship_and_Alternatives_To_Guardianship_ Booklet. pdf Rhode Island Secretary of State’s Website http: //sos. ri. gov/library/probate/ REMEMBER to consider that in other countries attorneys are still fighting to narrow the guardianship laws and protect the rights of individuals with disabilities! Copyright Amanda E. Tarzwell 2012

Special Needs Trusts (SNTs) • Trust acts as a firewall between person and $$$ • Allows parents to set aside $$$ for child (generally after parent is gone) without child losing government benefits (SSI, Medicaid, etc. ) • $$$ can be spent on the “extras”: – Trips, activities, entertainment, employment training, education, vacations i. e. things that improve quality of. Amanda life E. Tarzwell 2012 Copyright

Special Needs Trust • BUT…. . $$$ can only be paid out of the Trust in the absolute discretion of the Trustee • Therefore, it is important to choose a Trustee carefully Copyright Amanda E. Tarzwell 2012

Trustee’s Job Trustee has 2 jobs: 1) Making $$$ grow through investments 2) Distributing $$$ based on what the Trust says Copyright Amanda E. Tarzwell 2012

Selecting a Trustee • Who Can be a Trustee of a SNT? – Person (be cognizant of age) – Corporate – Combination of both • Who CANNOT be a Trustee of a SNT? – The child with a disability Copyright Amanda E. Tarzwell 2012

3 Types of Special Needs Trusts rd • 3 Party Trust – Parent/grandparent, etc. • 1 st Party Trust – Person with the disability • Pooled Trust – Managed by non-profit association Copyright Amanda E. Tarzwell 2012

3 rd Party Trust • Generally created by a family member for the benefit of person w/disability for life • After person’s death, $$$ is distributed according to trust document • No government payback!!!! Copyright Amanda E. Tarzwell 2012

1 st Party Trust • Established using $$$ of person w/disability – Ex: parent dies and leaves child w/disability a share of his estate or makes child a beneficiary of a life insurance policy • It is important to make sure grandparents’ documents do not leave assets directly to grandchild with disabilities!! Copyright Amanda E. Tarzwell 2012

1 st Party Trust • Requirements: – Only parent, grandparent, legal guardian or court can establish – Individual must be under 65 yrs. Old – Requires government payback provision Copyright Amanda E. Tarzwell 2012

Pooled Trusts • Pooled Trust is a SNT established by a non-profit association that serves as Trustee • Non-profit establishes sub-account for particular disabled person • At person’s death, $$$ left in account stays in Pooled Trust to help other person with disabilities or pay back to government • Good option for small amounts of $$$ Copyright Amanda E. Tarzwell 2012

What if I don’t do anything? • Without proper planning child will likely inherit $$$; • 1 st party trust will have to be established for assets or spent down; • Child may lose government benefits and/or housing Copyright Amanda E. Tarzwell 2012

Most Important Points • Guardianships are NOT required for all persons with disabilities • Planning for the future is important (don’t bury your head in the sand) Copyright Amanda E. Tarzwell 2012

Amanda E. Tarzwell, Esq. Law Office of Gayle F. Tarzwell 490 Woodruff Ave. Wakefield, RI, 02879 Tel: 401 -783 -0819 Tarzwellae@gmail. com Copyright Amanda E. Tarzwell 2012