Estates, Gifts & Trusts
Planning for Disability (816)
Portfolio Description
Tax Management Portfolio, Planning for Disability, No. 816, identifies estate planning issues that are peculiar to families whose members include disabled children and adults, and examines, in a very practical way, techniques available to anticipate and address these problems. This portfolio is intended as a "how to" primer on resolving estate planning problems when incompetency or disability is, or may become, a problem.
As a greater percentage of the population ages and sophisticated medical procedures prolong life, the planner's practice is more likely to include clients who may suffer a period of physical or mental incapacity. Early planning is necessary to establish mechanisms to shift control from the incapacitated individual to an agent who can work toward the individual's personal, medical, financial management, and asset conservation goals. This portfolio examines several available tools for financial management, which may be used singly or in combination, including guardianship, joint property, powers of attorney (both durable and "springing" powers), trusts (both revocable and irrevocable), and testamentary pour-over devices. Living wills and powers of attorney for medical decisionmaking, which may resolve certain personal issues, are also addressed.
Parents of disabled children may seek to make arrangements for the lifetime financial and personal care that their children will need, but the parents cannot always provide. Although tax issues should not be ignored, non-tax factors, such as maximization of the disabled child's potential, sound financial management, and selection of fiduciaries, often are the primary concerns.
Resource maximization is one of the greatest concerns of clients who fear becoming incompetent themselves or must plan for disabled children or other family members. Many federal and state benefits programs are available to disabled individuals, often on the basis of financial need (e.g., Supplemental Security Income and Medicaid). Age-based Medicare benefits cover doctor's bills, medication, and hospitalizations but need-based Medicaid continues to pay for nursing home care. Certain state benefits are subject to cost-of-care liability, which requires reimbursement from disabled persons and/or their families. Therefore, this portfolio presents information on certain useful government benefits programs, their income and resource eligibility requirements, and qualification mechanisms, which should aid the planner in developing a comprehensive estate plan. The portfolio also discusses methods for shielding all or a portion of the client's assets from cost-of-care liability.
This portfolio may be cited as Moore and Landsman, 816 T.M., Planning for Disability.
Ralph J. Moore, Jr., Yale College (B.A. 1954), School of Law, University of California at Berkeley (LL.B. 1959); Law Clerk to Chief Justice of the United States (1959-1960); Partner, Shea & Gardner, Washington, D.C.; admitted to practice in District of Columbia, Maryland, and California; member of American Bar Association, Real Property, Probate & Trust Law Section, District of Columbia Bar, Estates, Trusts & Probate Law Section, Maryland State Bar Association, Estate & Trust Law Section, State Bar of California, Estate Planning, Trust & Probate Law Section; Fellow, American College of Trusts and Estates Counsel and American Academy of Elderlaw Attorneys; author of Estate Planning for Families of Persons with Disabilities in Maryland, D.C., and Virginia (1989) and chapters on estate planning in Woodbine House series on disabilities.
Ron M. Landsman, University of Michigan (B.A. 1970), University of Michigan Law School (J.D., magna cum laude, 1974); admitted to practice in Maryland, District of Columbia, and before U.S. Supreme Court; Fellow and founding member of American Academy of Elderlaw Attorneys; Chairman, Maryland State Bar Association Elder Law Section (1997-98); regularly writes for The Elderlaw Report and the Journal of Asset Protection.
