Why Plan Now

Passing the Torch with a Letter of Intent

A Letter of Intent or Memorandum of Intent (Memo) communicates useful information about the person for whom you have created a special needs trust, “your beneficiary.” 

 

Even if you have not created a special needs trust, a memo or letter of intent provides guidelines and practical information for caregivers, guardians and relatives in case you're not available.  Although it’s not legally binding, a memo of intent is a great way to express your preferences and goals for your beneficiary. 

 

As a starting point, your memo or letter of intent should include:

 

·        Your beneficiary’s identifying information (full name, date and place of birth, Social Security number and current photo).

·        Contact information for those persons and agencies who can provide advice and help (e.g., Regional Center, case manager, caregivers and health care providers, dentist, therapists, attorney, successor trustees, close friends and family).

·        Details about living arrangements, including any restrictions or preferences, as well as other arrangements you have made for your beneficiary's financial security.

 

·        List of Agencies from which your beneficiary receives or may be eligible to receive public benefits.

 

·        Your beneficiary’s employment history, including contact information for current employer or vocational rehabilitation.

 

·        Guidelines about your beneficiary’s past, present and anticipated medical, residential, therapeutic, recreational, spiritual and related needs and interests. 

 

·        Any other special instructions or important information.

 

Coordinate the letter or memo with your special needs trust, if you have one.  Invite family members and, where appropriate, your beneficiary, to contribute to the memo.  Give the memo to those who may be responsible for decisions about your beneficiary.  And don’t forget to update your memo as circumstances change.

 

A well-drafted memo of intent can alleviate concerns your relatives and successors have about how they can effectively carry on in your absence.

What's So Special About A Special Needs Trust

A special needs trust is not so special if the government programs your loved one qualifies for do not have restrictions on holding assets. For example, you don’t need a special needs trust to protect eligibility for entitlement based benefits such as Social Security, SSDI (Social Security Disability), and Medicare which are employment-related public insurance programs. 

 

A special needs trust protects eligibility for needs-based government benefits such as SSI (Supplement Security Income), Medi-Cal (California's version of the federal Medicaid program), Veteran’s benefits, Section 8, In-Home Supportive Services (IISS.)  If your loved one qualifies now or will need these benefits in the near future, if your loved one is going through a personal injury action and stands to gain a large award, or if there will be an inheritance of over $50,000, a special needs trust may be a great planning tool to preserve eligibility for needs-based benefits.  

A special needs trust allows a public benefits recipient to have resources available to pay for items and services to make his life better (“special needs” above and beyond the basics) - without counting the trust assets against him for program eligibility purposes.  This is why a special needs trust is a powerful planning tool. 

An outright gift or inheritance of more than $2,000 made directly to the individual would disqualify her for needs-based government benefits. Re-qualifying for these services can be difficult and time-consuming. For persons who require consistent medical care or services, a disruption in eligibility can be very serious.  With a special needs trust in place, relatives can make gifts directly to the trust, rather than to the individual.  The trust can even be named as the beneficiary in another person’s will, trust, retirement plan or life insurance policy.  The trust can even own a 529 college savings plan.

 

Besides preserving eligibility for needs-based government services, a special needs trust also provides for the long-term care of your child in your absence. You can appoint a successor trustee and even authorize that person to hire care managers to continue the work you have done to obtain necessary benefits for your child. You can even include a memorandum of intent expressing your preferences and providing useful information for successor caregivers and trustees to carry on effectively after you. 

A special needs trust is a very special planning tool.