What Role Does a Representative Payee Play in Estate Planning?


The Social Security Administration defines a representative payee as a person or entity that is designated to manage or receive supplemental security income or social security income payments on behalf of a beneficiary. This is usually associated with those recipients of government benefits who are not able to manage their own income.

Representative payees are formally appointed by the Social Security Administration based on an application. More often than not this is a family member of the beneficiary but it can also be an organization. The beneficiary’s current personal needs should be the chief factor in determining the representative payee. This same person who also serves as trustee of a beneficiary’s special needs trust or the beneficiary’s agent under a power of attorney can also become the representative payee.

The representative payee has to do a number of different tasks associated with managing these benefits, including the opening and managing of a joint bank account as a representative payee in the beneficiary’s name.

Having these additional estate planning documents in place can help to draw the connection between the role that the representative payee plays for the beneficiary and can enable this party to make important financial decisions on behalf of a party who is otherwise unable to do so on their own. For more questions about the estate planning documents needed when you have a loved one with special needs in your family, set up a time to speak with an estate planning lawyer.

Don’t Forget Special Needs in Your Estate Planning

Financial planning is important for all families but having a child with special needs makes it even more imperative that parents consult directly with experienced professionals. Financial and estate planning for families with special needs should look to do everything possible to protect the special needs beneficiary’s rights and entitlement to particular government programs. 

For those parents who have children with special needs, the cost of a college education and adulthood can be catastrophic. In fact, the American College of Financial Services in Pennsylvania estimates that the typical cost of raising a child from birth to age 18 is $250,000, but it could be much closer to half a million dollars for a child with special needs.

Using the right strategies and professionals well in advance can help parents tackle the unique obstacles and issues that may be associated with providing care for a special needs child. Assembling a team of knowledgeable professionals who have worked in this field over the course of multiple years and have helped other families like yours is essential for giving you peace of mind. Some of the most important players on your team included an accountant, a caregiver, an estate planning attorney, and a financial advisor. Available government benefits should always be given top priority when establishing a long-term estate plan.

The support of an experienced lawyer is valuable for guiding families through common missteps that could otherwise expose their loved one to having those benefits slip away. Most parents and families are concerned about how to best protect these benefits, particularly, after the parents pass away and this could be a significant financial resource for the special needs child. However, basic estate planning mistakes could mean that those benefits disappear entirely, and it might be too late for the child after the issues have already emerged following both of the parents passing away.

If no other caregiver has been established in this important role, the special needs child could truly struggle to live their adult life. Careful planning well in advance should look at all of the important issues related to special needs planning and should provide a road map for how to protect current benefits and maximize strategies for care in the future.


Avoid These Mistakes When Planning for Your Special Needs Beneficiary

Do you have someone in your life who could be classified as a special needs beneficiary? If so, it is even more important that you have a knowledgeable estate planning lawyer to help you with this process. Planning for a loved one with special needs requires advanced consideration of how your many decisions might affect them in the future.

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First of all, avoid disinheriting a special needs beneficiary. Plenty of disabled individuals get public benefits to pay for their basic needs like medical care, shelter, and food. Some families have been told mistakenly to disinherit a person with special needs in order to preserve their entitlement to benefits, and to instead give that portion to a sibling to use for the disabled person’s needs. But if the sibling passes away or becomes incapacitated, then the support is not available to help the special needs child.

Putting together a special needs trust helps to guard against this problem. Procrastinating when it comes to planning for a special needs child can be extremely expensive. Families must plan early and use a special needs trust that is appropriately funded. If this does not happen, the inherited assets could be required to repay the estate for assistance provided when assets that are inherited out disqualify a beneficiary from getting needed benefits.

Finally, never ignore the special needs of that beneficiary when conducting the planning process. An appropriately designed special needs trust gives happiness and comfort for a special needs beneficiary while ensuring that they maintain their eligibility for benefits.

An appropriately funded trust can help to pay for education expenses, medical costs and necessary equipment. Furthermore, the trust can also be used to make this special needs child’s life more comfortable, including quality of life-enhancing expenses like those typically provided by parents.  Selecting a trustee wisely is even more important when establishing a special needs trust since this person will have important responsibilities.


What You Need to Know About a Supplemental Special Needs Trust

You already know as a parent of child with special needs that you need to look to the future with care. If you’re no longer able to around to help support a child with special needs, things in your child’s life could become very difficult. It’s natural to want to plan ahead, but you should know that the way you do this can have big ramifications for your future. Mistakes made could cost your loved one government benefits. plan ahead with a special needs trust

Planning ahead for a child with a disability is extremely important for any parent who finds themselves in a position of looking to the future. A carefully constructed trust known as a supplemental special needs trust can help your child not just now but well into the future. This can allow your child to receive necessary funds for his or her lifestyle, without jeopardizing critical government benefits like supplemental security income and Medicaid.

For friends and extended family, this is an additional way to help provide care if something happens to you and you are no longer able to support them. Families that are in a difficult financial situation may delay putting together a trust, thinking that if they have no money to contribute currently, that they don’t need to do so. However, a supplemental special needs trust could be made the beneficiary of your estate and your life insurance policy, ensuring that those assets are not transferred immediately to the child when you pass away, which could jeopardize his or her ability to receive those critical government benefits.

Estate planning and financial planning, particularly as it relates to special needs children is not expensive and can be carefully constructed with the help of an attorney.  


Do You Have Significant Planning Needs?

Many people might assume that they don’t need the benefits of estate planning and will therefore, put off this process entirely. However, more and more people are in need of advanced planning strategies and finding themselves in a crisis situation, such as when a loved one who handled all of the finances passes away or when someone becomes incapacitated suddenly can be overwhelming. Advanced planning considerations are especially true for those families who have children with special needs. get help with planning for a child with autism

Children with varying types of disabilities, including autism, will likely need a parent’s financial assistance over the course of their entire lives. Finding the appropriate wealth management planner is extremely important. One in forty children between the ages of three and seventeen in the United States will be diagnosed with autism spectrum disorder and autism, according to research from the National Health Interview Survey. This disorder first became included in tracking in the early 2000s by the CDC. The condition is a very complex one but one that requires advanced planning considerations. Research shows that it can cost $17000 or more each year to care for a child who has autism than it does for a child without the disorder.

For those children with severe autism, the expenses increase. When a family member first comes to see a financial advisor, they can be overwhelmed by all of the different options. A financial professional and estate planning attorney can help to alleviate some of the burden by ensuring that appropriate planning channels have been put in place.

What You Should Know About Special Accounts for the Disabled


You may have heard that there’s a new kind of plan out there for savings for disabled individuals, specifically as it relates to long-term care. Some people are under the impression that this is a new version of a 529 plan, but it’s actually a new type of account that is similar in certain ways, especially meant for those who have disabilities. This is known as the ‘Achieving A Better Life Experience’ Act which was signed by Barack Obama in December of 2014. This Law allows individuals with disabilities to have a tax-free savings account in which they can set aside up to $100,000 without jeopardizing their eligibility for government programs, like Medicaid or supplemental security income. shutterstock_165450731

This is known as the ‘Achieving A Better Life Experience’ Act, which was signed by Barack Obama in December of 2014. This Law allows individuals with disabilities to have a tax-free savings account in which they can set aside up to $100,000 without jeopardizing their eligibility for government programs, like Medicaid or Supplemental Security Income.

SSI benefits would be suspended for individuals who have more $100,000 in these accounts, but Medicaid benefits would continue. These ABLE accounts are modeled quite like 529 college savings plan, since interest earned on the savings is income tax-free. Bear in  mind, however, that any contributions to an account like this are not tax-deductible, though.

The funds inside an ABLE account can be used to pay for healthcare, transportation, housing, and education. In order to qualify to have an account like this, an individual has to have a disability that occurred prior to Age 26.

There are annual caps on contributions under the Federal annual gift-tax exclusion. In 2016, this amount is $14,000. If you’d like to talk more about caring for an individual in your family who has special needs, consult with an experienced New Jersey estate planning attorney today.

Best Practices for Passing on Assets to Special Needs Beneficiaries

The tax code on its own is quite confusing but it can become even more complicated when you’re thinking about leaving behind assets for a special needs beneficiary. One of the most common points of confusion in the U.S. tax code has to do with the gift tax.

While most people are familiar with the basic magic number of $14,000 which is what each individual can give to one other person per year. Some clarification and planning strategies are necessary for individuals with special needs beneficiaries. How you pass on assets to a beneficiary with special needs is critical. Because you do not want to do this in a manner that would compromise that person’s eligibility for government programs. shutterstock_128618072

Special needs individuals frequently rely on government programs to help support them well into adulthood. It’s a good idea to talk over planning opportunities like trusts that can help to provide for an individual with special needs without removing his or her possibility of receiving assets or receiving benefits from these essential government programs. Consult with a knowledgeable estate planning attorney today to see how you can address this issue.

The Right Way to Plan for Your Special Needs Child

Parents of special needs children have unique needs when it comes to estate planning. As a recent article explains, parents of special needs children who have not yet created an estate plan should put it on the top of their to-do list.

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Unlike the majority of non-special needs children, many special needs children will require constant care for the remainder of their lives. Additionally, many special needs children are not able to work or otherwise earn the income necessary to pay for their care. Therefore, planning for a special needs child includes not only leaving the proper amount of resources for procuring the proper care, but also helping to determine how that care will be provided.

However, planning for special needs children is not as simple as leaving ample resources and a plan for that child’s continuing care. This is because most special needs children already receive government benefits to assist in paying for their care. However, these benefits are need-based and will cease if the child no longer qualifies to receive them. Therefore, many parents of special needs children employ a special needs trust. This trust, rather than the child, owns the child’s inheritance. By using this trust, the money is not considered to be the child’s and he or she will continue to receive government benefits.

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Avoid These Common Estate Planning Mistakes

Estate planning is a field fraught with pitfalls. All too often, estate planning mistakes are discovered after the person who created the estate plan has passed on, so he or she cannot fix the problem or explain his or her intentions. A recent article discusses several estate planning mistakes to avoid.

Naming Special Needs Minors or Adults as Beneficiaries
This is often problematic because special needs individuals often receive benefits from the government. However, most of these benefits are needs based, and may cease if the individual receives a large inheritance. Therefore, gifts to special needs individuals must be structured in a way – such as a trust – that keeps them out of the immediate control of the individual.

Failing to Name a Contingent Beneficiary
Failing to name a contingent beneficiary becomes problematic when the primary beneficiary either predeceases the person who created the estate plan, or disclaims his or her share. In either situation, if a contingent beneficiary is not named, the share would pass in accordance with the intestacy statute under state law.

Naming Your Estate As The Beneficiary on a Retirement Plan
When an individual receives the proceeds of a retirement plan after the death of the plan owner, he or she can take advantage of special IRA “stretch out” provisions. Using these provisions, the beneficiary can structure the inherited IRA to receive distributions throughout his or her life. These provisions do not apply when the beneficiary on the plan is an estate.