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Divorce When There is a Child with Special Needs

This guest post is from Benjamin Rubin.

When parents of a child with special needs get divorced there are many additional complications beyond a traditional divorce involving children. First and foremost, child support must be very Blog-Divorce-Main-Landscapecarefully considered to ensure that there is no loss of benefits. Child support payments that are required to be paid by a parent in accordance with Illinois state law by Court order, may result in a reduction or the complete elimination of a child’s SSI (Supplemental Security Income) benefit as well as the child’s Medicaid, which provides the child’s medical coverage, therapy, employment support, and home or residential support services (such as group homes) needed for the appropriate support for that child with special needs, and the custodial parent. For a child age 18 or older one hundred percent (100%) minus $20.00 of the child support payments ordered by Court, count as a reduction against SSI.

Government benefits can be protected, however, if the court order directs that child support payments are to be made to a “special version” of a Special Needs Trust for the sole benefit of that child, known as a self-settled special needs trust (also known as a 1st party, “pay-back,” OBRA, d4A, or d4C special needs trust). It’s important to note that this is different than the type of special needs trust most commonly established by parents for gifts and inheritances which is often called a 3rd party special needs trust.

Support payments to a 1st party special needs trust do not displace SSI, nor jeopardize Medicaid and Medicaid Waiver programs (such as group homes and day programs), greatly benefitting both parents and the child. It should be noted that for smaller child support payments (if total child support ordered is currently less than $14,000 per year) an ABLE account may be used. For more information about ABLE accounts please see ABLE article.

Again, for a child age 18 or older, one hundred percent (100%) minus $20.00 of the child support payment counts as a reduction against SSI; unless the court order provides that such support be paid irrevocably to an appropriate special needs trust or to an ABLE account in some cases (see above).

There are other considerations that have particular importance in the context of a child with special needs which should be discussed. First, health insurance coverage can be crucial. In Illinois it can be maintained by the parents of a child with special needs, in most cases, until the parents retire. Second, life insurance proceeds may be ordered by the court to be paid to a special needs trust, however, under current POMS (Social Security’s rules) and Medicaid regulations it does not need to go to a 1st party special needs trust as is the case with child support. It is highly recommended that a special needs planning attorney be consulted on all of these matters.

NSPT offers services in Bucktown, Evanston, Deerfield, Lincolnwood, Glenview, Lake Bluff, Des Plaines, Hinsdale and Mequon. If you have questions or concerns about your child, we would love to help! Give us a call at (877) 486-4140 and speak to one of our Family Child Advocates!

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Benjamin (Benji) Rubin’s older brother Mitchell has Autism and lives in a Clearbrook CILA. Benji graduated from the University of Illinois College of Law, Magna Cum Laude, received his undergraduate degree from Northwestern University, and currently is pursuing his Graduate Law Degree, an LLM (Tax), at Northwestern University. Benji, a partner in the law firm, joined the practice in 2010. Benji is a member of the Academy of Special Needs Planners, a member of the Special Needs Alliance, is Vice Chairman of the American Bar Association Special Needs Planning Committee, serves as the President of SIBS (Supporting Illinois Brothers and Sisters), the Illinois chapter of the national Sibling Leadership Network, is a member of the Board of Directors of The Arc of Illinois, is a member of the Clearbrook Associate Board, and serves on the Advisory Council of Encompass(Encompass in partnership with Jewish Child & Family Services, Jewish United Fund, JVS Chicago, JCC Chicago, Keshet, and The Center for Enriched Living and Center for Independent Futures, seeks to provide adults with I/DD a full array of financially sustainable, community-based services and supports), and is a member of the Board of Directors of the SEDOL (Special Education District of Lake County) Foundation. Benji is also a Faculty Member for the Illinois Institute for Continuing Legal Education (IICLE). Having Mitchell as a brother profoundly shaped who Benji is today, and thus the type of law he chose to practice. His personal experiences as a sibling offer a unique perspective into the responsibilities that come with caring for a sibling with special needs. Now, as an adult, those sometimes present and future responsibilities he will have regarding his brother’s care are a concern that he shares with all brothers and sisters of individuals with special needs.

Who Will Take Care of our Special Needs Children When We’re Gone? Who Will Provide for Them Financially?

This guest post is from Howard N. Suss, MBA.

These are questions my wife, Zahava, and I talk about. Our son Shimmy is a spunky, lively, 15-year-old young man with both Down Syndrome and Autism. Shimmy is usually the life of the partyblog-financial-main-landscape and can make everyone in a room laugh, but also exhibits extreme behavioral issues (Thank you North Shore Pediatric Therapy, for helping us improve in that area).

About two years ago, our family (my wife and 6 kids) attended a special needs family retreat and my older kids had an “ah ha” moment when they attended a siblings presentation (this is a presentation that was given by a social worker, who herself has a 30-year-old brother with Down Syndrome). This presenter opened their eyes to the probable eventuality that one day THEY were going to have to take care of Shimmy. That wasn’t something a 20-year-old was expecting to hear.

My kids, generally, are very good with Shimmy and they work really well with him as far as providing for his needs and well being, as well as his safety. Long term, I’m not really concerned about that. What I am concerned about, and what I have been counseling clients about for over 20 years, is the financial burden that I don’t want placed on the kids when they have to step in, one day.

I have been practicing long term financial and estate planning, in general, and special needs planning in particular, for over 20 years. My company, The Suss Financial Group, is located in Skokie, Il. and we have an attorney in the office (I am not an attorney, we often work together).

My client’s number one objective is to structure a plan to provide long term income for their special needs “child” without jeopardizing government benefits, such as SSI. We work on setting aside money, on a consistent basis so that there is money for the future. This is a must for everyone, but especially for families in our situation. Things can change, but as it appears now, our Shimmy will probably not be able to earn a living and that’s why planning is so important.

There isn’t one financial solution for every family. I would recommend that you sit down with both a special needs planning attorney and a financial planner to discuss your specifics, but here are some ideas that work for clients who have family members with special needs:

  • Systematic savings for the individual with special needs either in the bank or brokerage account
  • Stocks, bonds or mutual funds
  • Private investments
  • Life insurance

Usually life insurance is the way to go, because you can provide a large sum for not a lot of money. The thought is, that the real need for funds results when mom and/or dad pass away and in most cases that’s not until much later in life. We will discuss this in more detail in a future blog.

Please remember that you really don’t want to title any assets in your kid’s name as it will affect his/her government benefits.

NSPT offers services in Bucktown, Evanston, Highland Park, Lincolnwood, Glenview, Lake Bluff, Des Plaines, Hinsdale and Milwaukee. If you have questions or concerns about your child, we would love to help! Give us a call at (877) 486-4140 and speak to one of our Family Child Advocates!

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Howard N. Suss is a Registered Representative of Park Avenue Securities LLC (PAS). OSJ: 2550 Compass Road Suite H, Glenview, IL 60026. 847-564-0123 Securities products offered through PAS, member FINRA, SPIC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. The Suss Financial Group is not an affiliate or subsidiary of PAS or Guardian. 2016-28772 Exp. 9/16

howard-sussHoward N. Suss, MBD, has been practicing long term financial and estate planning , in general, and special needs planning in particular, for over 20 years. His company, The Suss Financial Group, is located in Skokie, Il. Howard resides in Chicago with his wife Zahava and 6 kids (one married and 2 in college) as well as 3 younger kids at home, including Shimmy, who has both Down Syndrome and Autism.

 

Howard can be reached at:

The Suss Financial Group
8170 McCormick Blvd., Suite 102
Skokie, IL. 60076
(847) 674 9470 ext. 1, office
(847) 674 9473 fax
www.sussfinancial.com