The Elder Law Coach

Expanding Your Practice with Special Needs Trusts

• Todd Whatley

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In this episode, we explore the vital role of special needs trusts in elder law, discussing their importance for families and how attorneys can incorporate them into their practices. With practical marketing strategies and insights, listeners learn how to serve this unique community effectively.

• Understanding the significance of special needs trusts 
• Navigating client needs in the realm of elder law 
• The impact of financial advisors and CPAs on trust planning 
• Effective marketing strategies for reaching families in need 
• The advantages of creating dedicated special needs trusts 
• Legal considerations regarding congressional changes and trust regulations 
• Strengthening professional relationships within the community 

If you are interested in coaching, please visit www.theelderlawcoach.com for more information.

Check out our new website www.TheElderLawCoach.com.

Speaker 1:

Thank you. Specialized experience, Whether you're an established attorney looking to refine your expertise or an emerging lawyer seeking a successful foray into elder law, this is your masterclass. Now let's get started with the luminary in the field. Here's Todd Whatley.

Speaker 2:

That's right. This is the Elder Law Coach and I am Todd Whatley and, as always, I am very thankful for you downloading, listening and subscribing. I'm getting pretty, you know well over a hundred downloads as soon as I put this up, which means people have downloaded this, and I appreciate that. And if you haven't done that, I would encourage you to do that. I am on a mission to do a podcast a week throughout 2025. And so there will be a lot of content coming through here and I encourage you to subscribe, all right. So let's get right to it.

Speaker 2:

Today's topic is a practice area that, if you're not doing this, I highly encourage you to do it, and I want to talk about why. And that practice area is special needs trust, or supplemental needs trust. If you're not familiar with that, let's talk about that very quickly, just so you can know what it is, and then I'll explain why it's so important. And this is one of those areas that I'm very passionate about because, if you know my history passionate about because, if you know my history, I started out as a physical therapist. I had a have a master's degree in physical therapy, did that for 13 years until I got bored and went to law school and me being bored with that had nothing to do with the clients. I love the clients, love doing it. It's just I just wanted to do something different.

Speaker 2:

But special needs trust or special needs people are very special people. This population is very near and dear to the family's hearts, to friends' hearts, to a lot of people, and they want to make sure that these people are taken care of because, by definition, they typically cannot take care of themselves and they need a lot of you know, sometimes a lot of help, sometimes not much help, but typically with someone who will be a client for this type of work. This person doesn't work and probably never will work and is on Medicaid for benefits, typically medical help, financial help and they need to keep these benefits. But people family members want to leave them money, want to help them the best way they can, but helping them financially will cause them to lose their Medicaid benefits unless something special is done and that something special is a special needs trust. This population is very close-knit. The families of special needs people are very close. They talk, they communicate and if you can get in with this group and do very good work for them, serve them, work with them. They will tell other people and your business will thrive tremendously from working with this population. Okay, it's a fun group. Okay, these families are very passionate. The special needs client is sometimes very interesting, very fun to work with and everyone appreciates what you do. Okay, and everyone appreciates what you do Okay, and I think, as the population is aging and if you do elder law, this is an area that you need to be familiar with, because a lot of times, families come in for just general estate planning, and when the issue of a special needs child or grandchild comes up, this is the families want to protect this child.

Speaker 2:

They want to leave them money, knowing that this child never will be able to work, or, if they do work, it's very minimal and they need money to support themselves, because Medicaid doesn't do everything or it's a very minimal amount of financial support for this child. But they want to do more. But giving them money will cause them to lose their benefits, and so a special needs trust has specific language in it that allows the person to still get Medicaid but also benefit from money. Okay, families are are seeking out this help. They, um, they either know about it and want someone to do this for them, or they don't know about it, but they do know that. Um, they have heard of solutions, they know there are problems with leaving a child money and they are seeking out legal assistance to do this and you are very specifically positioned to provide this benefit.

Speaker 2:

I will tell you financial planners, cpas they are being inundated with estate planning solutions. Okay, software, hey, get your client to do this with you rather than with an attorney. Those solutions are very basic, very generic, but the general public just thinks, okay, a trust is a trust is a trust. And when they have their estate planning person not their estate when they have their financial person, their CPA financial advisor also offer them an estate plan. They're like oh sure, why not? But I will tell you, this is an area that is very specific special needs planning. These families of special needs, people don't mess around, they don't want to mess this up and I would hope that a CPA financial advisor who's offering this estate planning software work would come to their senses and realize, okay, if we're doing, if this family is asking for something to help a child who is on public benefits, we don't want to mess this up. And that software will definitely mess them up, and surely they will seek the advice of an attorney to do this, and that's where you come in.

Speaker 2:

You present yourself as the expert on this, with your knowledge of Medicaid and estate planning. It combines those to make sure this is done absolutely correct. And there are a lot of potholes here. There are a lot of areas that can cause problems, and I would hope that a financial advisor, cpa, would come to their senses and say we need to seek out the advice of an expert and you can become that expert in this area, okay, and so I want to talk about you know there, there may be someone in your community who is doing this, who is well known for this. That's fine, you can do it too. Okay, competition's always good for people being out there, as another alternative is is good. It's good for that person to know someone is out there competing with them. It'll keep them on their toes, make sure that they're doing a good job, but it will also force you to do a good job or a better job at this. And communicating and providing this service to people Okay, marketing to this group is kind of easy, because these groups tend to congregate at the daycare that is special for these people at.

Speaker 2:

You know there are events, there are things that are specifically for this population, and if you can get in there, if you can talk to the director at a special needs daycare or a adult facility that works with this population, if you can get in with them and say, hey, I'm an attorney, I do special needs work and what can I do for you, how can I get on your list of referrals? Can I do a lunch and learn? Can I come out after hours and have families come in and speak? What can I do and speak? What can I do? How can I get in front of these people to get them the services that they are looking for? It's not that you're selling them anything. They are looking for this and you are able to provide that and it's a it's a very close community. Okay, so if you choose to do this and I encourage that you do get out there to these facilities, talk to them and get in front of them and see what you can do to to make their life easier, and they will then refer folks to you.

Speaker 2:

Another great marketing um location or, you know, population is personal injury attorneys. When a personal injury attorney settles a lawsuit, and particularly if it's for a person who became disabled because of this incident, car wreck, medical malpractice whatever they are suing for, medical malpractice, whatever they are suing for. If this person is now so injured that they are disabled and that they are on Medicaid, this settlement needs to be handled in a specific way and a special needs trust is the way to do that. And marketing to these people is pretty straightforward Find out who does it, call them and say, hey, do you have a special needs trust attorney? Even if they do, that's fine, still go talk to them and say, hey, I'm doing this. Also, if your person is busy, can't get this to you in sufficient time, please call me. I'm into this, I have time. I can turn this around pretty quickly for you. So here's my card Give me a call and they will definitely be open to having someone else out there that they can call on.

Speaker 2:

Increase your general client satisfaction being able to meet with a person who hasn't thought about this to say, hey, you have a special needs grandchild. What have you thought about doing for this child? How do you plan on leaving your estate? Would you like to leave some money to this child who will never work, who needs extra help. Have you thought about leaving money to them? Typically, they'll say, yes, but if I leave them money, they will lose their benefits. You're like you're exactly correct, but here's a solution and that will make their day. They're like, yeah, this is fantastic. Now let's talk about when you get to this point.

Speaker 2:

Okay, I would hope that every revocable living trust that you do has contingency special needs trust language in it, meaning if, at the death of your clients, the trust creators, if at their death there is a disabled child, their share of the money goes into a special needs trust. I would hope that every trust that you do does that, and I honestly think it's almost malpractice if you don't do that. However, that is not sufficient. When there is a known special needs trust person out there, okay, when there is a known special needs trust or special needs person, I encourage you to present to your client to say, hey, I think we should do a separate freestanding special needs trust. Okay, that that means an additional trust to do today. Okay, when you do their revocable living trust, you will also create a freestanding special needs trust that is created, it's funded slightly and it's there, ready, willing and able to accept funds when the trust makers pass away. Okay. There are three reasons that I recommend that you do a separate, freestanding special needs trust.

Speaker 2:

Number one what Congress gives Congress can take away. Okay, the ability to put money into this trust and still get a federal benefit, medicaid or social security federal benefit, medicaid or Social Security is a grace from Congress. Congress says, sure, we will let you do this with the understanding particularly if the disabled person's putting their money into the trust that is a first party special needs trust we will get our money back when that person dies. Or if there is any money left in this trust, we will get it. Okay, that's an agreement that Congress has made with these people to say, sure, we'll let you stay on Medicaid, but the money from this trust will go back to reimburse Medicaid for the care that you got. So if Congress gives that to us, they can also take it away.

Speaker 2:

They can pass a law to say, hey, we see that there's a lot of money being protected and people are on benefits when they have money. We don't like that anymore, we're going to change it. And so from this date forward, or in 60 days, 90 days, whatever special needs trust will be outlawed. Whatever special needs trust will be outlawed. Now I don't see them ever making that law retroactive to say all current special needs trusts are now outlawed. They would just say, from this point forward, special needs trust are outlawed. Therefore, if you have a special needs trust that is up and going today and that law is passed next month, your special needs trust will not be affected by the new law. It will be only for trust created from that point forward, your testamentary special needs trust in your revocable living trust. If it is created in the future when your client dies and Congress has changed the rules, that special needs trust would not get created.

Speaker 2:

Okay, you see my point. So I want to do it today, so that it is up and going today and therefore not subject to the whims of Congress later on. It's there, it's going, it's slightly funded and will not be affected by future laws. That's number one. Number two I want to I have this trust up and going and in effect, so that I can send it to Social Security and have them look at it and either give me their blessing or tell me what they don't like about it. Ok, so every time I do a freestanding special needs trust, we send a copy to Social Security just your, your local office with a cover letter that says hey, we did a special needs trust for this beneficiary. Here's their social security number. Please look at it. If you have any concerns with it, please let me know. All right, do they do that? No, they do not. I've done dozens of these, sent them to social security and I think I've gotten one letter back. Okay, they typically don't respond, they're like whatever, fine, well, I send it to them with a return receipt, green card or you know something online saying that they got it. I make a copy of that and I put it in my client's file so that we know that they got it.

Speaker 2:

They had the opportunity to look at it and they chose not to. Then, 10, 15 years from now, when your clients pass away and a substantial amount of money goes into this trust, everybody gets concerned. It's like, oh, this person on Medicaid just got a few hundred thousand dollars. They then start looking at it. It's like, oh, this person on Medicaid just got a few hundred thousand dollars. They then start looking at it. It's like, yeah, we don't like this language or this language or this language. It's like, well, and they send you the letter, the family freaks out, they bring you the letter and you're like hey, medic, hey, social security.

Speaker 2:

Fifteen years ago I sent you this letter. You got it on this date. I gave you the opportunity to look at it at that point in time. You chose not to, so you're kind of stuck with it. Okay, now it's the federal government. They can kind of do what they want to. But I do think that that carries a lot of weight to a judge to say, hey, we gave them the opportunity when we created this while we could change it, and they did not do anything. Okay, so I think it at least puts you in a better position to say you're kind of stuck with it. You can't make changes now, when you had the opportunity to do it later.

Speaker 2:

Whereas if you rely on that testamentary special needs trust that is not created until the person dies, then you send that special needs trust to the social security office and they complain about it. They have a good position to say, yeah, we don't like this, and it's very difficult then to change because the trust makers have passed away. That's point number two. Point number three is there may be other people who want to benefit this child or this person. Okay, you do it so that your clients, the parents or grandparents, at their death, a portion of their inheritance will go to this special needs trust to benefit this person. But other people may want to help this child. They're like, oh, there's a trust, we can name that trust as a beneficiary of our land. Say it's the grandparents or aunts and uncles or cousins or siblings. They're like, hey, I want some money to go to the special needs trust. You can't leave money to a future created, testamentary special needs trust. You can only leave it to one that is created now, has a date and is up and freestanding, and so it gives other people the opportunity to leave money to this child Parents love this idea or the creator of this trust who's saying, yes, I want to benefit this person, but if this will allow other people to also benefit this child, that's a great idea.

Speaker 2:

So therefore, that's why I encourage three good reasons to do a separate, freestanding special needs trust so you not only do your client's revocable living trust, powers of attorney, all of that, you also get to do another trust on top of that, which does cost more, but to the client it is worth it. It's like this is definitely worth it to know that we're sending it to social security, they're going to look at it. They may or may not complain about it, but at least they've been given notice. This is in effect today. When we do it, it's not subject to the whims of Congress and other people can't benefit this child, it just makes sense. And pretty much every time I have presented that to a client and I charge somewhere between $1,500 and $2,500 extra for this trust, families are like, yeah, let's do it, it's fine. Yeah, that's a great idea, let's do it, all right. So I highly encourage you that if you don't do special needs trust planning, you need to, and hopefully I've given you good reasons and some quick marketing tips on doing that.

Speaker 2:

Now, if you're like, but Todd, I don't know how to do this, I've never done this before I would not have any idea what to do with a client who called to say, hey, do you do special needs trust? Well, if you do coaching, you can take those clients. You can say, yeah, come on in, let's get some information, gather the information and then call me and let's solve this problem. Ok, that's the purpose of coaching is knowing that I am there with you. I will help you from the very start. I have slide decks ready to go for presentations to this community. You just take out my information, put in your information. It is ready to go. It works. It's a fantastic slideshow that will get people in the door to have you do special needs trust for them.

Speaker 2:

You can take this client having no idea what to do. Get on the phone with me. I will walk you through this. I'll even do the initial meeting with you by phone to help field their questions, answer their questions, help. Both of you know. Yes, we do have a solution for this and you don't have to turn these people away. I will help you draft the documents with your software. I know Wealth Council. I know Elder Council. I know Interactive Legal. If you have something different than that, it might take me a little while to figure it out, but I can definitely help you go through and do a special needs trust and make sure that you do the right one. We talked about a first party special needs trust. There's also a third party. You don't want to do the wrong one because you will cause problems and it's malpractice to do a first party when you should have done a third party because there's a payback. So all of that stuff we will cover in coaching and I would encourage you please implement special needs trust.

Speaker 2:

It's fun, clients love it. You'll love it because you know you get a fun special needs person in your office. It's truly fun. You know one of my favorite clients to bring in are clients that have Down syndrome. You know one of my favorite clients to bring in are clients that have Down syndrome. You know Down syndrome kids. They're typically living their best life. I mean they're not stressed, they're just living life and they enjoy it. And some of your higher functioning Down syndrome are just fun to work with, okay, and they appreciate what you're doing. The parents appreciate it and it's a lifelong client that you will get to work with and you'll truly have fun with it. So please do it.

Speaker 2:

And if you are interested in coaching, please go to the elder law coachcom. You'll get a ton of information there. I would love to work with you, help you get this along with a state planning for older people Medicaid. I have the complete training program ready to go. I would love to work with you. Also on the website, you can schedule a phone call appointment with me. I would love to talk to you If you do have questions, if you're like well, I don't know if coaching is good for my practice, let's talk about it.

Speaker 2:

Okay, there are some people that I've told no, I don't think you're ready, I don't think this is something that it's not worth the investment right now. I'll be honest with you. Okay, you're not going to get on the phone with me and, you know, feel like you're being badgered into it. It's a thing that if it's not a good fit for both of us, we're not going to do it. Okay, I don't want you to be forced into this. I only want to work with people who want to work with me and then I can see implement this into their practice and do what I think is the best job in the world. Okay, give us a call, visit the website and I would love to work with you and I will see you next time.

Speaker 1:

Thank you for joining this episode of the Elder Law Coach Podcast. For those eager to take their elder law practice to new heights and are interested in Todd's acclaimed coaching program, visit wwwtheelderlawcoachcom. With Todd Watley by your side, the journey to becoming an elder law authority has never been more achievable. Until next time, keep learning, keep growing and stay passionate about elder law.