Caring for a loved one with special needs involves unique challenges, including financial planning for their future well-being. Special Needs Trusts, sometimes referred to as Supplemental Needs Trusts,  are powerful tools designed to provide for individuals with special needs while preserving their eligibility for government assistance programs.

What is a Special Needs Trust?

A Special Needs Trust is a legal instrument created to manage and protect assets for the benefit of an individual with a disability. The primary goal of a  Special Needs Trust is to ensure that the person with special needs has access to funds to enhance their quality of life without jeopardizing their eligibility for essential government benefits such as Medicaid and Supplemental Security Income (SSI).

Types of Special Needs Trusts

• First-Party Special Needs Trust (Self-Settled Trust):

This trust is funded with the assets or inheritance of the person with special needs. It is often used when the individual unexpectedly comes into money, like receiving an inheritance or a settlement from a lawsuit, so that they do not lose Medicaid or SSI benefits. 

A first party special needs trust is subject to payback provisions, meaning that any funds remaining in the trust upon the beneficiary’s passing must be used to reimburse the government for Medicaid expenses incurred during their lifetime.

• Third-Party Special Needs Trust:

Family members or loved ones establish this trust for the benefit of the person with special needs. It is commonly used to provide for the individual’s supplementary needs, such as education, transportation, and recreation. Unlike first-party trusts, there are no payback provisions, so any remaining funds can be distributed to other heirs or charities after the beneficiary’s passing.

• Pooled Trusts:

Pooled trusts are managed by nonprofit organizations, where the assets of multiple beneficiaries are combined for investment purposes. Each beneficiary has their own subaccount within the pooled trust. They are an excellent option for individuals with smaller assets, or those who may not have a trusted family member to act as a trustee.

A pooled trust is also the only option for individuals age 65 or older who need to use their own assets to create a SNT to protect benefits.

Special Needs Trusts are invaluable tools for ensuring that individuals with disabilities receive the care and support they deserve while protecting their eligibility for government benefits. Understanding the various types of SNTs and the steps involved in creating them is essential for families navigating the complex world of special needs planning.

Seek professional guidance to make informed decisions and secure a brighter future for your loved ones with special needs. Contact Attorney Jill M. Santiago today by clicking the link below to schedule your appointment to discuss your estate planning needs.

Confused about Estate Planning and don’t know where to start? Here are a few Frequently Asked Questions that may help:

Do I need an estate plan?

Yes, if you have any assets and care about who receives them after your passing, as well as who will oversee their distribution, you need an estate plan.

What is probate?

Probate is the court process required to re-title the assets of a deceased person, such as a home or a car.

Why should I avoid probate?

Probate is a lengthy process (a minimum of 6 months in Rhode Island), expensive (involves court fees, attorney fees, and fiduciary fees), and it is public (documents filed with the probate court are accessible to anyone).

Should I have a will?

Yes, regardless of your circumstances, having a will is essential to ensure your assets are distributed according to your wishes.

What is the difference between a will and a trust?

A will simply names the people who will receive your property after you die, and names the person or people who will be in charge of distributing your property. Even if you have a will, your estate is still subject to the probate process.

A trust holds title to your property during your lifetime, and also dictates who will receive your property, and who will be in charge of that distribution, after you die. Because your property is already titled to the trust, there is no need for probate.

What is a Power of Attorney (POA)?

A Power of Attorney is a document that grants another person (Agent or Attorney in Fact) authority to manage your assets or make healthcare decisions on your behalf if you are unable to do so.

What is the spouse’s elective share?

Under state law, your surviving spouse is entitled to a share of your estate, even if you explicitly leave nothing to them in your will.

Can I do an estate plan if I am single and have no children?

Yes, if you are unmarried and childless, you can create a will or trust; otherwise, your estate will pass to your heirs at law, such as parents, siblings, or other relatives.

How much does estate planning cost?

The cost varies based on your situation. Consider the value of your estate and your peace of mind when determining your budget for an estate plan.

Lawyers may charge an hourly fee to draft your estate plan, or they may charge a flat fee. Other lawyers may charge a percentage based on the gross value of your estate (1% – 4%). The average cost of a will-based estate plan is $2,000. The average cost of a trust-based estate plan is $5,500. Plans that require Medicaid/ long term care or Asset Protection planning are considerably more expensive.

What is long-term care planning?

Long-term care, particularly in nursing homes, can be expensive (thin $10,000 per month or more). If you have substantial assets, you might need to plan ahead to preserve them for your spouse or children in the event of long-term care needs.

What is a Special Needs Trust?

A Special Needs Trust is created for a person with a disability to hold their assets and maintain government benefits like SSI and Medicaid. It can be established by a third party or the disabled person using their assets.

Does a Living Trust provide Medicaid protection for my home?

Only if the Living Trust is Irrevocable and contains specific provisions relating to Medicaid protections.

Do I need an attorney to do my estate plan?

Yes. There are many DIY options that will give you estate planning documents, but they will not give you any legal advice. Having an experienced estate planning attorney create your plan is the only way to ensure it meets your needs and expectations.

What should I expect if I hire JMS Law to handle my estate planning needs?

When you choose JMS Law:

• We will listen to your story and concerns.
• We will address your questions and concerns thoroughly.
• We will create an estate plan tailored to your current needs and flexible enough to meet future requirements.
• We will maintain an ongoing relationship with you to ensure your plan remains up-to-date and aligned with your wishes.

For any other inquiries or to schedule a consultation, please contact us. Your peace of mind is our priority.

When it comes to estate planning, two common tools often come to mind: wills and trusts. But how do you know which you need? Both provide for distribution of your property after your death. However, wills and trusts operate differently and come with distinct advantages and disadvantages. Here, we’ll compare and contrast wills and trusts to help you make informed decisions about which option suits your needs best.

Wills: The Basics.

A will, also known as a last will and testament, is a legal document that outlines how a person’s property and assets will be distributed upon their death. Here’s a breakdown of its characteristics:

• Distribution of Assets: A will allows you to specify how you want your assets to be distributed among your beneficiaries. You can name individuals, organizations, or even create specific bequests, such as leaving a family heirloom to a loved one.
• Guardianship: For parents with minor children, a will is where you can nominate a guardian to take care of your children in the event of your passing.
• Probate Process: Upon your death, your will must go through a legal process known as probate, during which a court validates the will and oversees its execution. This process can be time-consuming and costly, potentially delaying asset distribution.
• Public Record: Wills become a matter of public record upon entering probate, which means the contents of your will, including the assets you have and who receives them, can be accessed by anyone.

Trusts: The Basics   

A trust, on the other hand, is a legal entity that holds and manages assets for the benefit of certain individuals or entities. Trusts offer a more comprehensive approach to estate planning:

• Distribution of Assets: Trusts allow you to distribute assets both during your lifetime and after your death. This flexibility enables you to provide ongoing support for beneficiaries.
• Avoiding Probate: Assets held within a trust usually avoid the probate process, resulting in quicker and more private distribution. This can save time and money for your beneficiaries.
• Privacy: Trusts offer a higher level of privacy since their contents typically remain private, unlike wills which become part of public records.
• Control and Conditions: With trusts, you can set conditions on how and when assets are distributed. For example, you can specify that a certain amount is to be distributed annually for educational purposes.

          Types of Trusts:

There are various types of trusts, including revocable (can be changed during your lifetime) and irrevocable (cannot be easily changed) trusts, as well as special needs trusts, charitable trusts, and more. Each type serves specific purposes.

Choosing Between Wills and Trusts: Factors to Consider Deciding between a will and a trust depends on your individual circumstances and goals:

• Complexity of Assets: If you have a complex financial situation, multiple properties, or significant investments, a trust might be more suitable to manage these assets efficiently.
• Desire for Privacy: If you value privacy and wish to keep your estate matters confidential, a trust can help you achieve this goal.
• Potential for Incapacity: Trusts often have provisions for managing assets in case of incapacity, which can provide a seamless transition without court intervention.
• Flexibility: Wills are typically easier to create and modify, while trusts offer more intricate control over asset distribution.

Wills and trusts are both valuable tools in estate planning, each offering distinct advantages depending on your specific circumstances and goals. Wills are suitable for simpler situations and offer a basic framework for asset distribution, while trusts provide a more comprehensive and flexible approach, often avoiding the probate process and providing greater privacy.

Ultimately, the decision between wills and trusts should be made after careful consideration of your assets, family dynamics, and future plans. Consulting with an experienced Estate Planning Attorney will help you navigate the complexities of estate planning and ensure that your wishes are carried out effectively.

So, you have been named as a trustee of a trust, and this comes with “powers.” What exactly does that entail? In this blog post, I will review the basics of the role of a trustee.

What are Trustee Powers?

The powers of a trustee of a trust can vary depending on the specific terms of the trust instrument and the laws governing the trust. Generally, the trustee has a range of powers and responsibilities related to managing the assets held in the trust and ensuring that the trust’s purposes and objectives are carried out.

Some of the typical powers of a trustee may include:

• Managing trust assets: The trustee has the power to manage, invest, and sell the assets held in the trust. This includes making decisions about when and how to buy and sell investments, as well as deciding how to distribute the income and principal of the trust to beneficiaries.
• Distributing trust assets: The trustee has the power to distribute trust assets to beneficiaries according to the terms of the trust. This may involve making regular distributions of income to beneficiaries or making one-time distributions of principal.
• Making decisions about the trust: The trustee has the power to make decisions about the trust, such as hiring professionals to assist with trust administration, making decisions about legal or tax matters, and determining how to respond to requests or challenges from beneficiaries.
• Protecting trust assets: The trustee has a duty to protect the assets held in the trust from loss or damage, which may involve taking steps to insure or safeguard those assets.
• Accounting and recordkeeping: The trustee has a duty to maintain accurate records of trust transactions and to provide regular reports to beneficiaries regarding the status of the trust.

The powers of a trustee are generally used to fulfill the trustee’s fiduciary duty to act in the best interests of the trust and its beneficiaries. The trustee must carefully balance the competing interests of different beneficiaries, and make decisions that are consistent with the terms of the trust instrument and applicable law.

The trustee is a fiduciary role, not to be taken lightly. Often, a trustee will seek advice from professionals, such as attorneys or accountants, to ensure that they are making informed decisions about the trust.

To learn more about your duties as a Trustee, contact Attorney Jill M. Santiago by clicking below.

Starting a business can have significant implications for your estate plan, as it will likely affect your assets and liabilities, and potentially impact your family’s financial security in the future.

Here are a few ways that starting a business could affect your estate plan:

1. Reassess your assets: Starting a business may change your financial situation and the value of your estate. It is important to reassess your assets and determine how your business will fit into your estate plan. You may need to adjust your estate planning documents to account for any changes in your assets, liabilities, and income.

2. Consider business succession planning: If you plan to pass your business on to your heirs, you will need to consider how to structure your business succession plan. This may involve establishing a trust or creating a buy-sell agreement to transfer ownership of the business in the event of your death.

3. Update your will: Your will should reflect your current wishes for the distribution of your assets, including any business interests you may have. If you have not yet created a will, starting a business may make it even more important to do so.

4. Review your life insurance policies: If you have life insurance policies, you may need to review them to ensure that they provide sufficient coverage to protect your family’s financial future in the event of your death. You may also want to consider adding a business continuation rider to your policy to ensure that your business can continue to operate in the event of your death.

5. Consider the tax implications: Starting a business may have tax implications that you need to consider as part of your estate plan. Depending on the structure of your business, you may be subject to estate and gift taxes, as well as income taxes. You may want to consult with a tax professional to determine the best approach for minimizing your tax liability.

It is important to work with an experienced estate planning attorney to ensure that your estate plan reflects your wishes and protects your family’s financial future, taking into account any changes resulting from your business.

Today’s financial and estate planning tools give us lots of options when it comes to looking after our human loved ones postmortem, such as life insurance, wills, trusts, holding property jointly, etc. But what about our other loved ones—our pets?

Introducing the Pet Trust!

What is a pet trust?

A pet trust is a legal arrangement providing for the care and maintenance of your pets should they outlive you. Pet trusts are created to ensure that your animal is cared for, and you have peace of mind knowing your faithful companion will be in good hands.

How is a pet trust created?

The pet trust can be created in a few different ways. For instance, you can create a pet trust within your own living trust, or you can create a testamentary pet trust in your will. You could also create a stand alone trust for your pet, but it is more cost effective to include it in your own estate plan.

How does the pet trust work?

You choose a caregiver (the trustee) and leave instructions about which type of food you prefer your pets eat, which veterinarian should be responsible for managing their health, and how they should be groomed. You also set aside funds to pay for your pet’s care and maintenance.

For example: You have a cat and a dog. Together they have an average life expectancy of 15 years. Their care costs, including vet visits, food, boarding, grooming, and costs you around $5,000 a year. You could create a pet trust and fund it with $75,000, which would cover the costs of the pets for up to 15 years. You could include instructions for the trustee that if any funds are left over when the trust expires, they should be donated to your local ASPCA or pet rescue organization.

All 50 states have laws that recognize pet trusts, though the wording may vary from state to state, and not all are enforceable.

For example, Alaska’s law specifies that pet trusts are allowed for designated domestic or pet animals. Other states, including Arizona and California, only mention “animals” in the wording of their pet trust statutes.

For those states with enforceable pet trust laws, people are allowed to petition the court if they have reason to believe that the animals’ welfare is not being properly maintained.

I would not counsel all my pet owning clients to include a Pet Trust in their estate plan. But for those who keep pets with exceptionally long life spans—such as parrots 70 years, horses 35 years, box turtles 30 years, or clients who run animal rescues, should consider creating a trust to look after their animals when they are gone.

Some of the pet trust pros….

Pet trusts create a legal obligation to care for your pet in accordance with your wishes,

• It provides accountability for the funds you leave to the caretaker, and
• It allows you to set up a care plan that will take effect if you become incapacitated and are no longer able to care for your pets.

And the cons….

They are inflexible if circumstances change after your death

• They are not always enforceable
• They can be altered by the court. For example, Leona Helmsley left a hefty portion of her estate to her dog while disinheriting grandchildren. The court however reduced the amount of money in trust for the dog and distributed a portion to the disinherited grandkids.

Pets are treated like family members these days, but it wasn’t always so. Just a few decades ago dogs slept outside in dog houses, cats were kept outside and expected to sustain on whatever they could hunt and catch. Now we pamper our pet. But if don’t make arrangements for your pet in your estate plan, the care your pet gets depends upon what arrangements you’ve made, or not made. For instance, if you have no estate plan, your possessions will pass according to state law, and your pets are considered property for these purposes. Thus, you should consult with an experienced estate planning attorney to ensure your pets are properly cared for when you are no longer able to.

Estate planning involves the creation of legal documents that provide for the disposition of your estate when you pass away or become incapacitated. Your estate includes all of your possessions—your real estate, automobiles, bank accounts, investments, life insurance and personal belongings. Having an estate plan gives you control over how your affairs are arranged. You must make these decisions while you are alive and have all of your mental faculties. If you wait, you risk placing these decisions in the hands of the state and probate court.

1. Estate planning is more than just a will

It is super easy to make a will these days. Several online providers offer do-it-yourself wills and trusts for little money. Most people think they are all set once they have executed a will. However, there are other considerations, including:

Durable powers of attorney appointing individuals to make financial and/or medical decisions if you are unable to make these decisions yourself. Health care proxies, also known as living wills, these state the kinds of medical treatment you want and don’t want if you become incapacitated. Trusts which pass property to your selected beneficiaries that provide tax benefits for both you and your loved ones

2. Proper estate planning saves time and money

When a person dies without a will it is known as dying “intestate.” In this situation, state law dictates what happens to your estate. If you have made no plan, a case must be filed with the probate court in order to appoint a person to be the administrator of your estate. All of your debts, which now belong to your estate, must be paid first before property passes to your heirs. Probate is a lengthy process and can be very expensive.

3. Avoids hefty taxes

Maybe you have heard of the “death tax.” This is just a term used to describe taxes your estate will owe to the federal and/or state government. While right now, in 2022, the federal estate tax exemption is a little over $12,000,000, that is slated to drop significantly in 2026. In addition, many states have much lower exemptions. For example, Massachusetts is set at $1,000,000. This means if your estate is worth even a dollar more, estate tax will be owed.

4. Protects children and special needs dependents

If you have minor children, you must ask yourself who will have custody of them if I die before they reach majority? What if there is no other custodial parent? Without an estate plan you are leaving this in the hands of the state. Planning ahead gives you control over who will raise your children if you die while they are still under 18. You may appoint a grandparent, aunt or uncle, or a close friend. If you care for an adult with special needs, you are able to secure housing and funds for that person’s future care.

5. Takes care of your future needs

An estate plan not only arranges your affairs at the time of your death, it can also provide for you if you become incapacitated. A durable power of attorney will ensure a trusted individual will look after your financial and medical affairs. A living will ensures you will not be given medical treatment you would otherwise refuse. A well-written trust can provide for you financially before and after incapacitation, and distribute your assets to your chosen beneficiaries—all in one document.

Now Its Your Turn

Estate planning is not just for elderly and/or wealthy people. Make an appointment today with an experienced estate planning attorney by clicking below, and take control of your future.

There are many different ways to prepare for your future with your estate planning attorney. There are many different types of documents, plans, and decisions that you have to make when deciding how you want to distribute your estate. When looking at the options and deciding what estate plan is best for your situation, you may find yourself wondering: what is the difference between a will and a trust? How do I decide which is best for me?

There isn’t just one type of will or one type of trust. It depends upon your personal situation, so it could look different for everyone. However, there are a few key differences that you want to make sure you take note of when you are making your decision.

Wills, And Avoiding Probate

One of the biggest differences between a will and a trust is that a will in Rhode Island does not avoid probate. A will can settle a dispute as to how an estate will be distributed, but it will still have to go through the lengthy and often expensive probate process.

A trust, on the other hand, avoids the probate process, which can be especially beneficial if you choose to title your home, vehicles, or other assets into a trust.

Although a will itself cannot avoid probate, a will can help you avoid probate if a title company makes a mistake. For example, if you intended to title your house into your trust but the title company does not follow through renaming the house, a will can protect your assets and intentions and prevent you from having to go through probate because of the mistake.

Trusts, And Nomination of a Guardian

Another huge difference is how a person can nominate a guardian for any minor children they have. A trust cannot nominate a guardian in any way. If you have children of minor age, it is important that you use a will to name their guardian in the case of unexpected events.

A trust can rename your assets with a designation to your children, but your trust cannot establish a guardian for your children.

Wills And Trusts Working in Tandem

A person will almost always need both a will and a trust. These two documents work hand in hand in distributing your estate, nominating a guardian, and establishing control of your assets. Anyone who owns a home in Rhode Island will need to have a trust to title their home in. Very rarely will a person only need a will: unless they own a very modest estate, or do not own a house, you will almost always need both a trust and a will.

Wrapping Up

Everyone’s estate plan will be different, depending on their personal needs and circumstances. Although decision making regarding your estate plan can be confusing and daunting, remember that your estate planning attorney is there to help you remember the differences between each document, and help you decide the best solution for your situation. Schedule a callback by clicking the link below to talk more with me about what plan might be best for you!

When deciding your estate plan, there are many things you have to think about. Choosing the right plan, executing and organizing the documents, and meeting with your attorney are all part of the job of planning what will happen to your estate. But one thing that is integral to the process is often the one reason you want to plan in the first place: your family. Even though you’re in the director’s chair it can still be a difficult conversation to broach. At the same time knowing how to talk to your family about your estate plan can be an important step in creating the plan itself, so it has its benefits too.

Everyone has a different reality when it comes to planning their estate with their family. You may be thinking of doing what most do, leaving everything to your spouse and children, or your situation may be a little more nuanced and complex than that. Regardless of what you have in mind for your estate, involving your family in the decision making process can be a tricky thing. It’s important to really consider if, and how you want to involve your family when you are working with your estate planning attorney to plan for your future.

First, Do You WANT to Involve Your Family in Your Estate Plan?

First things first, ask yourself if you want your family to be involved. It is completely okay if you don’t, and a lot of people choose not to have their family involved in the decision making process. Ultimately, this is a process that only involves your assets: you have complete control over where they go and how they get there, and you have a right to hold that conversation how you would like to. If that means it remains a private conversation between you and your estate planning attorney, that is completely okay, regardless of your distribution decisions.

Sometimes, people may choose to avoid conversations with family members because of the choices they are making with their estate. Conversations regarding what you choose to leave behind, if anything, for your family members can be difficult. You have the ability to choose to keep your family uninformed of your decisions regarding your estate. If you decide that, the process and decisions made can remain completely confidential between you and your estate planning attorney until the time comes when your family members need to be notified.

Strategies for Involving Your Family in Your Estate Plan

If you want to involve your family, there are absolutely ways that you can do so. One way is to bring them right into the room and involve them in the conversation with your estate planning attorney. Doing this allows everyone to have a say, and to be able to give their opinion on what they think should be done with your estate. Hopefully, at the end of the day, you can make a decision that has all of your family members support. Even if not everyone is on board with the decision you make, it might be important for you to hear the opinions of your loved ones about what should be done with your estate.

When involving your family members’ input and opinions, it is vital to remember that, in decisions regarding your estate, you have the final say. You can listen and take as many ideas as you want from family members, but what happens to your assets is ultimately your decision. You can also decide just how involved you want your family to be. Whether you want your loved ones there for the entire process, or only there to hear out their opinions, you are in control of the situation. You decide who is there, for how long, and you choose what to listen to.

Wrapping Up

Family can be one of the most important things in our lives. Your family might even be the driving force in deciding to create an estate plan for your assets. If you choose to involve your family in your estate planning process, there are ways to ensure your family is able to give their input. You can decide together, and execute the plan as a team.

If you decide not to include your family, remember that you still have the guidance and advice of your attorney to help you. Even if you choose to make these decisions without familial input, you are not alone in this process. You have complete control over what you decide to do, and you have the final say on what happens to your assets.