Tips on Creating an Estate Plan that Benefits a Child with Special Needs

Parents want their children to be taken care of, but children with disabilities have increased financial and care needs, so ensuring their long-term welfare can be tricky. Proper planning by parents is necessary to benefit the child with a disability, including an adult child, as well as assist any siblings who may be left with the caretaking responsibility.

Special Needs Trusts
The best and most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits.

There are three main types of special needs trusts:

  • A first-party trust is designed to hold a beneficiary’s own assets. While the beneficiary is living, the funds in the trust are used for the beneficiary’s benefit, and when the beneficiary dies, any assets remaining in the trust are used to reimburse the government for the cost of medical care. These trusts are especially useful for beneficiaries who are receiving Medicaid, SSI or other needs-based benefits and come into large amounts of money, because the trust allows the beneficiaries to retain their benefits while still being able to use their own funds when necessary.
  • The third-party special needs trust is most often used by parents and other family members to assist a person with special needs. These trusts can hold any kind of asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and other types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary’s access to benefits and the funds can be used to pay for the beneficiary’s supplemental needs beyond those covered by government benefits. But a third-party special needs trust does not contain the “payback” provision found in first-party trusts. This means that when the beneficiary with special needs dies, any funds remaining in the trust can pass to other family members, or to charity, without having to be used to reimburse the government.
  • A pooled trust is an alternative to the first-party special needs trust.  Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes, while still maintaining separate accounts for each beneficiary’s needs. When the beneficiary dies, the funds remaining in the account reimburse the government for care, but a portion also goes towards the non-profit organization responsible for managing the trust.

Life Insurance
Not everyone has a large chunk of money that can be left to a special needs trust, so life insurance can be an essential tool. If you’ve established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. You should make sure you have enough insurance to pay for your child’s care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents’ estate intact for other family members. When looking for life insurance, consider a second-to-die policy. This type of policy only pays out after the second parent dies, and it has the benefit of lower premiums than regular life insurance policies. 

ABLE Account
An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.

Created by Congress in 2014 and modeled on 529 savings plans for higher education, these accounts can be used to pay for qualifying expenses of the account beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. ABLE account programs have been rolling out on a state-by-state basis, but even if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts. (For a directory of state programs, click here.)

Although it may be easy to set up an ABLE account, there are many hidden pitfalls associated with spending the funds in the accounts, both for the beneficiary and for her family members. In addition, ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like Medicaid and SSI. If there are funds remaining in an ABLE account upon the death of the account beneficiary, they must be first used to reimburse the government for Medicaid benefits received by the beneficiary, and then the remaining funds will have to pass through probate in order to be transferred to the beneficiary’s heirs.  

Get Help With Your Plan
However you decide to provide for a child with special needs, proper planning is essential. Talk to an experienced Florida attorney to determine the best plan for your family.

Adopting a Child in Florida

Adoption is a wonderful opportunity to provide a child with a forever home, and for those who petition for adoption, to become the legal parents of a child. Florida law sets out legal procedures for individuals and couples to adopt children, but understanding those laws and how they might impact your adoption can be overwhelming. Here are some of the questions our clients commonly ask when deciding whether to pursue an adoption in Florida.

Who Can Adopt a Child in Florida?

Single adults or married couples may jointly adopt a child in Florida. A married person may adopt individually, without their spouse, with the court’s approval. Previously, Florida law prohibited LGBT couples from adopting, but that law was ruled unconstitutional.

Relative adoptions, such as adoptions by stepparents, grandparents etc., are not required to obtain an adoption home study. Otherwise, potential adoptive parents must obtain a Florida adoption home study, which includes background checks, interviews, home inspections and more. A history of verified findings of abuse or neglect could lead a court to deny the adoption petition. The adoption home study must be conducted by a Licensed Care Social Worker.

Who Can Be Adopted in Florida?

Florida law allows anyone to be adopted through the filing of a Florida adoption petition. Children aged 12 or older must give their consent to the adoption unless the court decides that waiving the child’s consent is in their best interest.

Can I Reimburse the Child’s Biological Parents for Expenses Incurred in the Adoption?

To facilitate the adoption, many adopting parents and adoption agencies seek to reach compensation agreements with birth parents. Florida law imposes restrictions such agreements by specifying which expenses may be reimbursed to birth parents, and the amount of those expenses. To that end, adopting parents are required to file an affidavit outlining expenses incurred in the adoption.

Do the Child’s Birth Parents have to Sign a Written Consent to the Adoption?

Not necessarily, but the birth parents’ legal rights to the child must be extinguished in order to adopt the child. Most commonly, this is done through a written consent to adoption. The written consent must include certain warnings and notices to give the biological parent(s) knowledge of their legal rights in the case, or it will not be a valid consent. If the biological parent(s) sign the consent, and assuming other requirements are met, the adoption can be granted as an uncontested adoption.

If the biological parent(s) refuse to sign a consent, or their written consent cannot be obtained, an adoption may still be viable. In the majority of such cases, this is due to abandonment. To that end, Florida law states:

“In making a determination of abandonment at a hearing for termination of parental rights under this chapter, the court shall consider, among other relevant factors not inconsistent with this section:

  1. Whether the actions alleged to constitute abandonment demonstrate a willful disregard for the safety or welfare of the child or the unborn child;
  2. Whether the person alleged to have abandoned the child, while being able, failed to provide financial support;
  3. Whether the person alleged to have abandoned the child, while being able, failed to pay for medical treatment; and
  4. Whether the amount of support provided or medical expenses paid was appropriate, taking into consideration the needs of the child and relative means and resources available to the person alleged to have abandoned the child.”

How much will it cost to adopt a child in Florida?

Adoption costs can vary widely, depending on how the child is located, whether the adoption will be contested, whether an adoption home study will be required, and other factors.

Adopting a child who is in foster care can be relatively inexpensive as there are no adoption agency fees, and subsidies may be available to cover legal fees and expenses. However, since the goal of foster care is not to facilitate an adoption and the child may return to the parents, or other family before an adoption can be obtained. Alternatively, you may seek the assistance of a private adoption agency. Fees for private adoption agencies vary, but can exceed $30,000 in some cases.

If an adoption home study is needed, that fee is usually between $1,500 and $2,500.

Legal fees vary depending on whether the adoption is uncontested or contested by the biological parents.

Notably, there is one significant financial benefit of adopting a child, in certain cases. You may be eligible for tax credits of up to $13,810 per child. You should consult with an accountant to determine whether or not you will qualify for the tax credit.

How do I Get Started?

If you have questions about how to adopt a child, you should consult with a knowledgeable and experienced Florida adoption attorney. We have helped hundreds of individuals through adoption and termination of parental rights proceedings and we would be happy to meet with you and discuss your case. You can contact us at (850) 613-6923 or by clicking HERE. We have offices in Okaloosa and Walton County to serve residents throughout Northwest Florida.

How to Handle Sibling Disputes Over a Florida Power of Attorney

A power of attorney is one of the most important estate planning documents, but when one sibling is named in a power of attorney, there is the potential for disputes with other siblings. No matter which side you are on, it is important to know your rights and limitations.

A power of attorney allows someone to appoint another person — an “attorney-in-fact” or “agent” — to act in place of him or her — the “principal.” There are two types of powers of attorney: financial and medical. Financial powers of attorney usually include the right to open bank accounts, withdraw funds from bank accounts, trade stock, pay bills, and cash checks. They could also include the right to give gifts. Medical powers of attorney allow the agent to make health care decisions. In all of these tasks, the agent is required to act in the best interests of the principal. The power of attorney document explains the specific duties of the agent.

When a parent names only one child to be the agent under a power of attorney, it can cause bad feelings and distrust. If you are dealing with a sibling who has been named agent under a power of attorney or if you have been named agent under a power of attorney over your siblings, the following are some things to keep in mind:

  • Right to information. Your parent doesn’t have to tell you whom he or she chose as the agent. In addition, the agent under the power of attorney isn’t required to provide information about the parent to other family members.
  • Access to the parent. An agent under a financial power of attorney should not have the right to bar a sibling from seeing their parent. A medical power of attorney may give the agent the right to prevent access to a parent if the agent believes the visit would be detrimental to the parent’s health.
  • Revoking a power of attorney. As long as the parent is competent, he or she can revoke a power of attorney at any time for any reason. The parent should put the revocation in writing and inform the old agent.
  • Removing an agent under power of attorney. Once a parent is no longer competent, he or she cannot revoke the power of attorney. If the agent is acting improperly, family members can file a petition in court challenging the agent. If the court finds the agent is not acting in the principal’s best interest, the court can revoke the power of attorney and appoint a guardian.
  • The power of attorney ends at death. If the principal under the power of attorney dies, the agent no longer has any power over the principal’s estate. The court will need to appoint an executor or personal representative to manage the decedent’s property.

If you are executing a power of attorney document and want to avoid the potential for conflicts, there are some options. You can name co-agents in the document. You need to be careful how this is worded or it could cause more problems. The best way to name two co-agents is to let the agents act separately. Another option is to steer clear of family members and name a professional fiduciary.

Sibling disputes over how to provide care or where a parent will live can escalate into a guardianship battle that can cost the family thousands of dollars. Drafting a formal sibling agreement (also called a family care agreement) is a way to give guidance to the agent under the power of attorney and provide for consequences if the agreement isn’t followed. Even if you don’t draft a formal agreement, openly talking about the areas of potential disagreement can help. If necessary, a mediator can help families come to an agreement on care.

To determine the best way for your family to provide care, consult with an experienced Florida elder law attorney

The Best and Worst States for Protection Against Elder Abuse

The older the population gets, the greater the potential for elder abuse. States have laws in place designed to combat elder abuse, but some states are doing a better job than others. The consumer finance website WalletHub researched the protections in place in all 50 states and the District of Columbia to determine which states have the best protections against elder abuse. 

The prevalence of elder abuse is hard to calculate because the crime is underreported, but according to the National Council on Aging, approximately 1 in 10 Americans age 60 or older have experienced some form of elder abuse. In 2011, a MetLife study estimated that older Americans are losing $2.9 billion annually to elder financial abuse.

To determine its rankings, WalletHub compared the 50 states and the District of Columbia across three key areas: 
•    Prevalence of elder abuse in the state
•    Resources spent on preventing elder abuse and offering legal assistance
•    Protection against elder abuse through laws, the availability of eldercare organizations and services, the quality of nursing homes and assisted living facilities, and other factors

The survey found that Massachusetts, Wisconsin, and Nevada had the best protections overall while New Jersey, Wyoming, and South Carolina had the worst. Massachusetts, Wisconsin, and Nevada, along with Rhode Island and Arizona, all ranked high in total expenditures on elder abuse prevention. However, the states with the lowest rates of elder abuse, neglect, and exploitation complaints were Louisiana, New York, New Hampshire, Pennsylvania, and Michigan. Florida came in at the middle of the pack, ranking 22nd in protections against elder abuse.

WalletHub consulted with a panel of experts in social work, psychology, law, and gerontology on how to best protect seniors from abuse. Recommendations included incentivizing banks to report suspicious activity, requiring credit checks and background checks on caregivers, and providing more support to seniors to help them remain independent and be on the lookout for people trying to harm them. 

To see how your state compares in the WalletHub survey, click here. If you need to speak with an experienced Florida elder law attorney, click HERE or call (850) 613-6923.

Learn About Social Security’s Online Tools

With the aging population becoming increasingly tech savvy, the Social Security Administration (SSA) has moved a lot of services online. From applying for Social Security benefits to replacing a card, the SSA has online tools to help. 

To access most of the online services, you need to create a my Social Security account. This account allows you to receive personalized estimates of future benefits based on your real earnings, see your latest statement, and review your earnings history. You can also request a replacement Social Security card, check the status of an application, get direct deposit, or change your address. If you are a representative payee, you can use my Social Security to complete representative payee accounting reports. Even if you don’t get benefits, you can use the account to request a benefit verification letter.

In addition to my Social Security, other online services are available, including the following: 

For a full run down of the online services available, click here. To contact an experienced Florida elder law attorney, click HERE or call (850) 613-6923.