As divorce attorneys, sometimes we don’t know what we don’t know
Our Clients can sign the agreement, which has all of the traditional language. We may think we provided for each and every need of the child- their basic support, add-on activities, extra-curricular programs, perhaps a special school- but the question remains: What must we also consider when planning for a child with special needs?
The old adage that “an ounce of prevention is worth a pound of cure” rings particularly true when drafting provisions for a child with special needs. The key is to address problems before they materialize.
It is important to recognize that, either during childhood or upon reaching the age of 18, children with disabilities may become eligible for government benefits such as Supplemental Security Income (SSI) and Medicaid. A common pitfall not known to many practitioners is the fact that these programs have income and resource limitations – which means that the child who stands to receive these benefits cannot have more than $2,000.00 in his or her name.
The practitioner must also consider the fact that child support under Social Security regulations is income that is imputed to the child. If a parent of 2 children receives $1,000 a month in child support, the entire $1,000 is deemed to be income of the disabled child, disqualifying them for SSI and Medicaid.
There is a two-pronged solution that will satisfy federal and New York State law – first, a Court must allocate child support among the children. Second, the Court must order the child support allocated to the child with special needs to be deposited into a supplemental needs trust for the benefit of that child. This will ensure that the child with special needs will maintain eligibility for government benefits.
The beauty of a properly drafted supplemental needs trust is that it allows you to provide for the needs of your child while ensuring that they qualify for government benefits without regard to the balance of funds in the trust.
While the parting couple often does not agree on much, what they typically do agree on is that their children should be provided for, particularly children with special needs, in the years and decades to come. A thoughtfully drafted agreement will ensure that those needs are met long after pen has been put to paper on the agreement.
This blog was originally posted on the Sunshine, Isaacson & Hecht,LLP blog and is co-authored with Joshua B. Hecht. It is reprinted here with permission.