Planning for Life

When to Use an ABLE Account

Posted by Harry S. Margolis on January 29, 2019

By Harry S. Margolis

iStock-916417264

ABLE accounts were created by the Achieving a Better Life Experience Act of 2014 as an alternative to special needs trusts and to share the benefits of 529 plans for people who are unlikely to pursue higher education. They only go part way towards those goals but nevertheless can be very useful in providing flexibility around very strict public benefit rules, especially those of the Supplemental Security Income (SSI) program.

Read More

Topics: special needs planning, Special Needs Trust, ABLE Accounts, Attainable Savings Plan

Divorce-Created SNT Deemed Self-Settled for Creditor Purposes

Posted by Harry S. Margolis on January 22, 2019

By Harry S. Margolis

iStock-462098043

In determining eligibility for MassHealth and Supplemental Security Income (SSI), the state and federal agencies treat self-settled trusts -- those created by the applicant for benefit -- and third-party trusts -- those created by someone else -- entirely differently. The assets held in a self-settled trust are considered available to the applicant for benefits to the extent the trustee has discretion to distribute them to the applicant or to use them for her benefit. The assets of a third-party trust are only considered available to the extent the trustee actually distributes them to or uses them for the applicant for benefits.

These rules track the rules for creditors. With some exceptions, creditors can gain access to assets in trusts created by the debtor and cannot gain access to trusts created by someone else for the benefit of the debtor. The issue in the case of Calhoun, et al. v. Rawlins (93 Mass. App. Ct. 458, June 27, 2018) is whether a trust created by one divorcing spouse for the benefit of the other spouse is protected from the creditors of the beneficiary spouse. This has significance for special needs planning because it's not unusual for special needs trust to be created in the context of divorce.

Read More

Topics: special needs planning, divorce, Special Needs Trust, creditor protection

Choosing a Trustee for A Child’s Special Needs Trust

Posted by Karen Mariscal on November 7, 2017

by Karen B. Mariscal

Read More

Topics: trusts, special needs planning, special needs, Special Needs Child, Special Needs Trust, trustee

“I’d be Honored”: Paving the Way  For Your Special Needs Trustee - Preparing a Memorandum of Intent

Posted by Karen B. Mariscal on October 26, 2017

iStock-587221754.jpgWhen our autistic son was 8 years old, he was a holy terror.  That was true when he was younger than 8 and older than 8 (he settled down around the time of puberty, for which I am eternally grateful), but I am focusing on age 8 right now. We had two younger boys as well, then ages 5 and 4.  So when I asked my sister Laura whether she would be the guardian of our children, and take over if something happened to my husband and me, it was with great trepidation.  Laura knew full well what was going on in our house, and how difficult a request I was making.  She responded, without hesitation, “I’d be honored.”  I have tears in my eyes as I write this, as it never fails to get to me, even 17 years later.

Read More

Topics: trusts, special needs planning, Intellectually Disabled, autism, disability, Special Needs Child, Caregivers, Special Needs Trust

Special Needs Trusts and Retirement Benefits: A Complicated Subject

Posted by Anthony Bushu on May 5, 2017

By Karen Mariscal 

older parent and child.jpgMuch of your savings may be in your 401(k)’s and IRAs.  It is important to designate the proper beneficiaries for these accounts, so that your beneficiaries do not have to pay taxes on the funds prematurely. Unfortunately when a beneficiary has special needs, it gets complicated.

If the beneficiary receives the IRAs and 401(k)’s directly, the required minimum distributions (RMDs) could prevent your child from receiving the government benefits he needs. But if you designate a special needs trust as the beneficiary of a retirement account, there could be adverse income tax consequences. 

Fortunately, with proper drafting, such tax results usually can be prevented. People have written entire books on this subject -- this is our attempt to summarize the basic issues.           

Read More

Topics: Retirement Planning, Special Needs Trust, Retirement Benefits, Required Minimum Distributions

Why Lawyers Should Think Twice About Serving as Trustee

Posted by Jamie Marshall on April 28, 2011

By Harry S. Margolis

The story of a Massachusetts attorney who received a three-month suspension for failing to fulfill his duties as co-trustee of a special needs trust should serve as a cautionary tale for any attorney (or anyone else for that matter) asked to step into this role. The attorney was only two years out of law school when in 2003 a client asked him to become the independent co-trustee of a special needs trust for the benefit of the client’s son.

Read More

Topics: trusts, special needs planning, Special Needs Trust

Subscribe to New Blog Posts

Recent Posts

Most Popular Posts

Posts by Topic

see all