Five Key Tools in Planning for Children with Disabilities

Americans are living longer than they did in years past, including those with disabilities. Planning by parents can make all the difference in the life of a child with a disability, as well as that of his or her siblings who may be left with the responsibility for caretaking (on top of their own careers and caring for their own families).

Longer Life Expectancies

Until three years ago,* the life expectancy for Americans was steadily increasing each year. This includes persons with intellectual or development disabilities. For those persons, the average age at death ranges from mid50s to early 70s, depending on the condition. Critically important, though, is the projection that there will be a doubling of the number of Americans with intellectual or development disabilities who are age 60 or older, “from 641,860 in 2000 to 1.2 million by 2030.”**

According to one count, 730,000 people with developmental disabilities are living with caregivers who are 60 or older. This figure does not include adult children with other forms of disability or those who live separately but still depend on their families for vital support. A growing issue is what happens when those caregivers are no longer able to provide care. Planning is essential, and it includes a number of components.

Five Key Tools for Planning

1. Public Benefits for Children with Disabilities

Supplemental Security Income: SSI

SSI is a needs-based income provided as a public benefit for persons who are age 65 or older, blind, or disabled. As a needs-based program, key elements in qualifying for SSI are a person’s income and resources. The rules about what counts as a resource vary from state-to-state. Other special rules are in place for married persons applying for benefits. After qualifying for SSI, a person also might qualify for Medicaid to cover medical care and expenses. The current monthly benefit payment for an individual in 2019 for SSI is $771.

SSI, Under Eighteen

When a child with disabilities is under eighteen, the child might qualify for SSI (Supplemental Security Income) benefits if the child’s and the family’s resources are below a certain limit. These benefits are available for children who are blind or disabled. However, as noted, the family’s resources and income are also used in calculating eligibility.

SSI, Eighteen and Older

After turning eighteen, if the child was on SSI before, she might still qualify provided the disability continues. At this point, only the child’s resources are considered. Assuming the adult child has limited resources, is unmarried, and earns a very low (or no) income, this will likely be the benefit to pursue. Applying for this is done with the Social Security Administration.

Social Security Disability Insurance: SSDI

SSDI, in contrast to the needs-based SSI, is disability based. A person’s other resources are not a consideration in qualifying for SSDI. Instead, this involves the social security system and what’s been paid into it. The amount received as a benefit will depend on what was paid into the system. Those who receive SSDI benefits usually often receive Medicare for coverage of medical care after receiving SSDI benefits for two years.

SSDI is available to children whose disability began before age 22. A child’s benefit is usually available if a parent is either receiving social security retirement (or disability) benefits or was eligible for them (had paid enough into the system) but has died. Once a child turns eighteen, he or she can apply for SSDI (Social Security Disability Insurance) if the above requirements are met.

2. Guardian Advocacy for Children with Disabilities

When I worked with persons with intellectual and developmental disabilities, one day I received a call from a dentist’s office. The dentist wanted proof that one of our clients did not have a guardian. As I told the dentist, the client was over the age of eighteen; thus, he was his own guardian. The dentist said he needed proof. I asked him what proof he had that he was his own guardian. We went around in that circle for a few more minutes until he finally understood that no such proof existed. Nor is it required. (The organization I worked for used a human rights committee to assure adult residents' rights and needs were protected.)

When a person turns eighteen, the person becomes his or her own guardian. It’s that simple. The only proof we have is our age. This means too, though, that a person who has intellectual or developmental disabilities is also his or her own guardian at age eighteen. It’s that simple. But, of course, often that person does not actually have the capacity to manage money, enter contracts, and make key decisions. This means an official process is required.

In Florida, the process for a parent to be appointed as the guardian advocate of an adult child with intellectual or development disabilities is relatively straightforward. When a parent or close family member is applying to be appointed, usually the arduous (and expensive) process of declaring incompetency can be avoided. Thus, parents can navigate this process of applying for guardian advocacy on their own or, if preferred, work with an attorney.

Given, however, the aging population of parents who are serving as caregivers, a back-up plan should be in place for guardian advocacy. This is done during the initial process by appointing a standby guardian. This key element can help fill any gaps if the parent caregiver becomes incapacitated or passes away.

3. Living Arrangements for Children with Disabilities

When parent caregivers can no longer care for their children due to their own disability or death, the responsibility often falls on siblings, other family members, and the community. In many cases, expenses increase dramatically when care and guidance provided by parents must instead be provided by a professional for a fee.

A plan of care that carefully establishes where the child with special needs will live, who will be responsible for assisting the person with special needs with decision making (refer above to appointing a stand-by guardian advocate) and who will monitor the care for the person with special needs. It will help everyone involved if the parents create a written statement of their wishes for their child's care. They know him better than anyone else. They can explain what helps, what hurts, what scares their child (who, of course, is an adult), and what reassures him. When the parents are gone, their knowledge will go with them unless they pass it on.

For the adult child with disabilities, I’ve seen firsthand the trauma of a sudden change in living situations when the parent caregivers pass away. Consider that this person has spent his or her entire life living with parents. Suddenly, not only have the parents disappeared, but also the living situation suddenly changed. I cannot urge strongly enough to parents to make the plan and start introducing the new environment to their adult child while the parents are still alive. Thus, when or if that time comes, the new living arrangement is not as much of a jolt as otherwise.

4. Trusts for Children with Disabilities

In almost all cases where a parent will leave funds at death to a disabled child, this should be done in the form of a trust. Supplemental needs trusts (also known as “special needs” trusts) are an important component of planning for a disabled child (even though the child may be an adult by the time the trust is created or funded). These trusts allow a disabled beneficiary to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose her eligibility for certain government programs. The trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining her eligibility for public benefits.

Understanding Types of Special or Supplemental Needs Trusts

There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary, but they differ in several significant ways, and each type of trust can be useful in its own way. Using the correct trust is essential to protect a person’s eligibility for public benefits Additionally, a parent using the right tool can also help provide for other family members in the future.

Using a Trust to Benefit a Child with Disabilities

As their name implies, supplemental needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life.However, with the introduction of ABLE accounts in 2016 in Florida, the options to plan more thoroughly have greatly increased. A special needs attorney can help you understand how these tools can work together.

Choosing a Trustee

Choosing a trustee is also an important issue in using supplemental needs trusts. Family members are usually considered first, particularly parents while alive then adult siblings. However, many people do not have the expertise to manage a trust, even if they are family members, and so a professional trustee may be a wise choice.

Using a professional trustee helps take that burden off of family members. For those who may be uncomfortable with the idea of an outsider managing a loved one’s affairs, though, other options exist. An attorney might incorporate provisions for a trust “protector” who can review accounts and hire and fire the trustees. A trust “advisor” is also sometimes used to help assess the beneficiary’s needs.

5. Life Insurance Benefits for Children with Disabilities

Finally, a parent with a child with special needs might want to consider buying life insurance to fund the supplemental needs trust set up for the child’s support. What may look like a substantial sum to leave in trust today may run out after several years of paying for care that the parent had previously provided. The more resources available, the better the support that can be provided for the child. And if both parents are alive, the cost of “second-to-die” insurance—payable only when the second of the two parents passes away—can be surprisingly low. This is something to discuss with your insurance professional.

Particularly important is the combination of that insurance benefit and a supplemental needs trust. This way, when drafted correctly, any funds left after the child passes away can be directed to other children, grandchildren, charities, etc.

Next Steps

Working with an estate planning attorney who focuses on special needs planning is essential in developing a plan for a child with intellectual or developmental disabilities. This usually begins with a consultation followed by individualized planning for your particular situation.

*A December 2018 article by Meilan Solly suggests rising death rates from suicides and drug overdoses have reduced the U.S. life expectancy over the past three years.

**Heller, T., Stafford, P., Davis, L.A., Sedlezky, L., & Gaylord, V. (Eds.). (Winter 2010). Impact: Feature Issue on Aging and People with Intellectual and Developmental Disabilities, 23(1) [Minneapolis: University of Minnesota, Institute on Community Integration] (citing Bittles et al., 2002; Janicki, Dalton, Henderson, & Davidson, 1999).