Many individuals with special needs are not capable of working, so they do not receive health insurance through their employers. Obviously, these folks need coverage more than the average person, and Medicaid is there to fill the void.
The Supplemental Security Income (SSI) program provides a very modest stream of monthly cash to augment the health care insurance. Since these are need-based programs, you cannot qualify if you have more than $2000 in countable assets.
Medicaid Estate Recovery
After the death of a beneficiary, the Medicaid program is required to seek reimbursement from their estate. A person with less than $2000 in assets is not going to have much of an estate, so the cupboard is usually bare when Medicaid is looking through it.
Supplemental Needs Trust
The situation is different with regard to the estate of a benefit recipient if they were the beneficiary of a supplemental needs trust. A person with a disability that comes into money can use the resources to fund this type of trust, and they would not lose benefit eligibility.
When the trust is being established, a trustee would be named to act as the administrator, and the beneficiary would not be able to act as the trustee. Under the rules of these programs, the trustee could use assets in the trust to satisfy the supplemental needs of the beneficiary.
These would be anything other than food and shelter, but the beneficiary could live in a home that is technically owned by the trust. If assets are utilized to provide food and shelter under different circumstances, the benefits would not be completely forfeited.
Medicaid eligibility would remain intact, but there would be a reduction in the Supplemental Security Income payout. The maximum reduction is one third of the benefit plus an additional $20.
There is a long list of goods and services that can be provided by the trustee, including vacations with or without a companion, a specially equipped vehicle, training, tuition, electronic equipment, leisure activities, and medical and dental treatments not covered by Medicaid.
Funding Source
Since a person with a disability could qualify for these benefits if they are the beneficiary of a trust, there may well be assets remaining in the trust after the death of the beneficiary.
If the beneficiary was the source of the funding, it would be a self-settled or first party special needs trust. Under these circumstances, Medicaid would be able to attach property that is held by the trust after the death of the beneficiary.
When a third party uses their funds to establish a supplemental needs trust for the benefit of someone else, the recovery situation is different.
A successor beneficiary would be named in the trust declaration at the time of its creation. After the death of the initial beneficiary, the successor would receive distributions in accordance with the grantor’s wishes. Medicaid would have no access to the assets during the recovery phase.
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While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
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