Client Story: A Special Needs Trust Empowers the Caregiver and the Disabled Spouse

A married couple were long-time clients of the firm. From the beginning of our relationship with them, the husband (John) worked and his wife (Jane) was disabled due to a progressive disease. As the husband began to approach retirement age, they came to us to discuss retirement planning as well as planning for Jane’s care in the event John predeceased her. John knew that often, the demands of being a caregiver increase the likelihood that the special needs individual will outlive the caregiver.

John had been personally taking care of many of Jane’s needs over the years and while it had been important to him to do so, it took a physical and emotional toll on him as well. The progression of her disease required increasing attention and presence, which meant that he was spending less time taking care of himself and no longer enjoying many of the outside activities he had taken part in in the past.

John and Jane had received some advice from an attorney and a physician that they were unsure of and as part of our conversation, they sought our input on that advice.

We assembled an extended team of SHWM and Smith and Howard professionals as well as two outside providers: an attorney that specializes in special needs trusts and an advisor on aging life care. The team reviewed the situation, developed a recommendation and plan for the couple. The overall plan included addressing insurance coverage, estate planning, charitable giving and an overall financial plan for their current and future needs.

SHWM, in concert with the tax professionals of Smith and Howard, the attorney and the aging life care advisor set up a special needs trust for Jane and a third-party special needs trust for John. Part of John and Jane’s overall goals were to include charitable giving in their current and estate planning. We included this in our discussion and final plan with them. We were also able to help them determine eligibility for government benefits. We worked with the aging life care advisor to develop and ensure funds were available for a plan for Jane’s care that would enable John to take some time to himself and enjoy his outside activities. He is now able to spend time biking and take a long weekend with friends on trails or in the mountains and Jane has ongoing care that is carefully monitored to ensure that her needs are met as her medical condition changes.

Without addressing this issue proactively and with transparency among all parties, John would have been left on his own to care for his wife’s needs. The complexity of her medical care requires constant attention and substantial resources. This would have worn on his physical and mental state and could potentially create an even more dire circumstance for his wife were he to predecease her. Additionally, John would likely have worked longer to maintain his benefits and salary, had he not had a plan that allows him to retire at a reasonable age without substantial negative impact. With a plan in place, the needs of both Jane and John are now being met, they have peace of mind about their physical and financial situation and are able to spend less time worrying and more time enjoying their time together (and apart).