Special Needs Planning

Special Needs Planning Lawyers NYC

Serving New York City and the Surrounding Areas

Estate planning is a way of taking responsibility for your own financial future and that of your loved ones. An important part of that process is protecting family members with special needs who are, or will be, unable to provide for themselves. Often, this involves children with disabilities or elderly relatives who have become less physically and/or mentally competent to care for themselves and to manage their finances. Far more people than you might expect have children with special needs, such as Down syndrome, autism spectrum disorder, spina bifida, or some other ailment. Our society as a whole is becoming more and more aware of these children, as well as increasingly sensitive to the percentage of the elderly who need special care because of respiratory, cardiovascular, or neuromuscular disorders, or various forms of dementia.

How Our Special Needs Lawyers Can Help

The legal knowledge and experience of the skilled attorneys at Scaffidi & Associates will help you to ensure that your loved ones are safe and cared for both during your lifetime and, if you predecease them, after your passing. Leaving money to a special needs loved one through special needs planning is complicated by the fact that leaving them a typical inheritance will most likely jeopardize their government benefits. Programs such as Supplemental Security Income (SSI), Social Security Disability (SSD), or Medicaid, often require that the recipient be without substantial funds, so leaving a large sum to your special needs relative is counterproductive.

Creating Special Needs Trusts

Fortunately, there is a tried and true method of avoiding this problem, by creating a special needs trust for the person you love who is medically or mentally disabled. In order to establish such a trust, it’s important to have the help of an accomplished trust attorney who fully understands special needs planning and the purposes and limitations of a special needs trust. Basically, the trust puts funds into an account managed by a trustee you appoint to manage and distribute them as needed. This means that the money put into the trust does not belong to the special needs individual, but rather is a source of supplemental income to be doled out by a responsible trustee as required. Because the trust is not money of which the special needs party has control, it is not taken into account when the government considers his or her assets to determine benefits eligibility.

In most cases, our clients appoint themselves as trustees with an alternate trustee to take over if they become incapacitated or pass away. Clearly, this substitute trustee must be chosen wisely, as you need someone fully trustworthy and likely to make reasonable decisions.

What the Special Needs Individual is Entitled to Keep

When preparing for the care of a disabled adult, the government makes reasonable allowances. The special needs individual is permitted, for example, to retain his or her residence and motor vehicle without threatening government benefits. Any amount of money he or she possesses over $2,000, however, will jeopardize those benefits. In order to be effective, a special needs trust must be irrevocable. Obviously, the trust will end when the trust funds have been exhausted or when the beneficiary dies.

Legitimate Uses for Special Needs Trust Funds

There are a number of regulations surrounding special needs trusts. Trust funds are often used for goods and services that will enrich the beneficiary’s lifestyle, providing increased comfort and pleasure. The trustee, at his or her discretion, can use trust fund assets to pay for home furnishings, education, vehicle or travel expenses, recreation, vacations, restaurant meals, and to assist with out-of-pocket medical expenses.

Types of Special Needs Trusts

There are several types of special needs trust, each established to serve a distinct purpose.

Third-Party Trusts: This is the type of trust most typically used for the benefit of people with special needs. The trustee who has been chosen is allowed to use trust funds to provide personal services, luxury items, transportation, and vacations for the beneficiary, but the disabled party never has direct access to trust funds.

Pooled Trusts: A Pooled Income Trust, like a third-party trust, is designed to help an individual with special needs have a source of potential supplemental income while still keeping that individual eligible for public assistance benefits, such as Medicaid home care.

Pooled trusts are useful in three particular situations: [1] if you don’t have a good candidate to act as trustee, or [2] if you are leaving a relatively small sum and don’t want to set up an individual special needs trust, or [3] if the special needs individual is over the age of 65. Pooled trusts are administered by nonprofit organizations that receive and invest funds from a number of families. Each beneficiary retains a separate account and the trustee appointed by the nonprofit spends money on behalf of each beneficiary.

While pooled trusts are available in many areas of the country, they vary in terms of the ways they operate and the fees they charge. If you are considering becoming involved in a pooled trust, also known as a community trust, it is best to confer with your attorney to make sure the one you choose is well-run and has a good track record.

First-Party Trusts: First-party trusts come into play when the special needs individual receives money through any of the following:

  • Personal injury or other lawsuit awards
  • Retirement funds
  • Divorce settlement
  • Life insurance policy
  • Inheritance

Knowing that his or her government benefits are threatened by this development, the disabled person, hopefully with sound legal advice, puts the newly acquired money into a first-party trust. This protects government benefits while allowing for certain otherwise purchases for the benefit of the beneficiary.

It should be noted that a first-party trust must be:

  • Irrevocable, and
  • Created by a parent, guardian, or the court, if the beneficiary is a minor, and
  • Created for a beneficiary under the age of 6.5

Also, Medicaid will have to be reimbursed upon the beneficiary’s death or upon termination of a first-party trust, whichever occurs first.

Why You Should Our Special Needs Attorneys Soon as Possible

As you can see, there are legal complexities inherent in the creation of a special needs trust. For this reason, and because so much is at stake for your special needs loved one, it is imperative that you engage the services of an attorney experienced in establishing and overseeing supplemental needs trusts. Because the future is unpredictable, you should take steps to promptly ensure your loved one’s safety and comfort.

Our attorneys have outstanding credentials and Scaffidi & Associates is rated as a first-rate law firm by numerous well-respected organizations. Our attorneys are also compassionate individuals who understand the sensitive issues surrounding special needs planning. Why not let us assist you in protecting your special needs loved one from financial distress, and providing him or her with a stable and promising future? Get in touch with our office by phone or by filling out a contact form on our website.


We encourage you to take the time to explore this website as the information provided here will answer many of your questions. We believe that an educated client is our best client. We are also readily available to discuss your case in confidence, whether it’s a matter involving personal injury, medical malpractice, real estate, or other legal challenges. Regardless of the issue you are facing, we are uniquely qualified to provide you with exceptional legal representation and personal service. Call our office or complete the contact form on our website to set up a consultation.