Traumatic Brain Injury Life Care and Estate Planning

When an individual becomes disabled, there are challenges that require financial decisions. Each family needs a roadmap, basic tools, and the knowledge necessary to develop a financial plan. All traumatic brain injury life care planning for a person with disabilities starts with an understanding of the type of care required and an estimate of the cost of that care over that individual’s lifetime. Life Care Planners are experts trained to evaluate past and future medical and rehabilitation costs. These experts review medical records, medical reports, insurance policies, government entitlement programs, and benefits to create a life care plan.

A life care planner focuses on the medical treatment and records received to date, the current care required, and collaborates with the medical team to estimate the medical  care that will be necessary in the future. Items detailed in the plan can include such things as medical care, anticipated complications, future hospitalizations, surgeries, nursing care, diagnostic tests, medication, therapies, equipment, adaptive technology, housing, transportation, and case management. With this information, experts prepare a life care plan that estimates future costs. A life care plan can help the family make decisions about discharge planning, health insurance, government benefits, litigation, and home care or institutional care. The plan helps focus on the big questions: Who will care for your relative if you are not able, and how will you pay for this lifetime of care? With a lifecare plan, a family’s important decisions can become self-evident.

Life care planners come from different educational backgrounds and can include physicians, nurses, rehabilitation counselors, occupational therapists, physical therapists, social workers, and psychologists. There is typically no state license required to work as a life care planner. Life care plans by licensed professionals with education, training, and experience are routinely used and accepted as expert evidence in many situations, including Workers’ Compensation claims, civil litigation, mediation, insurance company evaluations, federal agency benefit evaluations (such as Medicare Set-Asides and the Vaccine Fund), and other situations. Private organizations, such as the American Academy of Physician Life Care Planners or the Certified Nurse Life Care Planner Certification Board certify life planners.

An estate plan is critical for families of people with disabilities. Estate planning, which includes wills and trusts, is the process of deciding how you want property distributed during your life and after your death. Families with relatives with significant medical problems, like traumatic brain injury, cerebral palsy, severe developmental delays, Down syndrome, and spinal cord injuries, should have an estate plan in place. In the event of a guardian’s death, there should be an understanding of who will make decisions for the person with disabilities. If there is no estate plan, the matter may need to go to court, and a judge — who does not know you, your values, or your relative — will have to make those decisions.

In addition, without an appropriate estate plan, it is possible that the person with disabilities could lose vital government benefits or receive money or property that they cannot manage. Individuals can make advanced arrangements with an estate plan for how assistance and guidance are to be provided when the family is no longer able to help. Specialized estate planning is necessary if your relative is unable to manage finances or is at risk of losing existing or potential government benefits.

There are special considerations for individuals with disabled relatives who are making estate plans. Those considerations include your relative’s abilities and needs, the government benefits and services that your relative is receiving or will receive in the future, the eligibility standards for government benefits and the effect that inheritance may have on eligibility, and the kind of guidance and assistance your relative may require in the future.

Estate lawyers draft trust and estates documents to follow state laws, which can vary widely. You will need to consult a local attorney for this assistance. If you do not have an attorney, local advocacy groups may be able to refer you to someone that has experience in preparing estate plans for people who have relatives with a disability. You can also contact your state or local bar association, which typically has a lawyer referral service and can help you locate attorneys who have training and experience in this area of the law.

You will need to prepare for your meeting with an estate attorney in advance. You should gather the following items:

• A list of assets that identifies who holds title to those assets, the present value of the assets, and for real estate, a list of any mortgage, debt, or liens against those assets.
• A list of each insurance policy, who owns each policy, whose life is insured by the policy, the face value of the policy, the cash surrender value of the policy, and the beneficiary of each policy.
• Copies of all financial statements, such as bank accounts, IRAs, 401(k) plans, pension and profit-sharing plans, CDs, brokerage accounts, and any other financial vehicles

Many individuals with disabilities will need and receive government benefits and services. In cases of disabling brain injuries, it is likely that you will decide to use government benefits to provide care and services to your loved one with supplemental personal and estate funds. Accordingly, when developing an estate plan, you must consider the government benefits your relative is currently receiving as well as those benefits that may become available and needed later.

If there is no will or estate plan in place, then it is possible that money, assets, or income will pass to your disabled relative and automatically disqualify your relative from receiving government benefits. Depending upon individual circumstances, it will be critical to have an estate plan in place that does not disqualify your relative. The impact on how your estate plan may have on the ability of your relative to continue to receive public benefits after your death depends on the category of benefits your disabled relative is receiving.

When planning your estate, if you have a disabled beneficiary, you must consider whether any of the above categories of services are or will be necessary and to what extent. You should also consider how your state administers these programs and whether inheritance will affect the cost to your relative to receive these services in the future. In addition, friends or relations sometimes may wish to leave something in their will or otherwise provide gifts. Although this may be well intentioned, these can also affect eligibility for government benefits. Once you have decided the best way to provide for your relative, make sure that you let your family and friends know your plan so that they can make appropriate decisions that are consistent with your plan.

It is beyond the scope of this book to discuss details of estate planning. Families with disabled relatives must discuss their personal estate plan with an attorney experienced in estate planning. Families need professional advice from an experienced attorney to get this job done right and avoid pitfalls. The trusts and wills found in self-help books and on websites do not begin to address all the complex legal issues that need to considered when involved when a  family is trying to protect a disabled family member, or where there has been a multi-million dollar recovery in a lawsuit. 

A signed will is a written legal document that determines who gets an individual’s property after death. However, if you do not make a will, state law will determine who gets your property. Each state has laws that deal with the distribution of the estates of individuals who die without a will, known as intestacy laws. For example, if you die before your spouse and children and without a will (intestate), many states provide that a spouse gets a share of your estate and the remainder of the estate is then split among your children. Accordingly, if you die without a will your estate may pay a substantial sum of money to your disabled relative and jeopardize government benefits. Therefore, it is important to make a will regardless of your personal wealth.

An individual has the right to decide who will become the owner of their estate after death through a will. A will can also include other financial decisions. For example, if your disabled relative is a minor (under age 18), a will can select your intended guardian of your child in the event of your death. If you fail to do this, the court will not know your wishes, which can lead to expensive legal proceedings. It can also result in a judge, who does not know you or your family, selecting the guardian of your child.

It is important to keep in mind that wills do not distribute all property. There are assets that are automatically distributed prior to your death. In fact, a substantial percentage of a person’s property typically passes outside of the will. For example, a joint bank account, or an account where money is held “in trust” for another, automatically belongs to the other person upon death. However, if you plan to keep all government benefits in place for a disabled relative, you do not want to leave cash to a relative in this manner. You should also carefully consider whether to establish accounts with that relative as the beneficiary. If you make an outright gift to a disabled relative, either through a will or outside a will, that gift can eliminate that relative’s eligibility for government benefits. Similarly, life insurance policies and pension benefits that name a disabled relative as the beneficiary can also eliminate eligibility.

An individual can always change their will at any time prior to their death. Changes in circumstances are always a good reason for families with a disabled relative to review their estate plan. However, when a will includes gifts to disable persons, you should not change your plan without the assistance of an expert attorney.

Trusts are another useful tool to help families provide for disabled relatives while still preserving      government benefits. A trust is a legal document that allows a person, known as the grantor, to place money into a trust which is administered by one person or institution, known as the trustee, for the benefit of another, known as the beneficiary. Expert estate lawyers know how to draft trust documents that can both protect your disabled relative’s eligibility for benefits and provide for management of money with or without the need for a guardianship. An individual can create a trust during their life, or a  trust can be created by an individual upon their death under the terms of the will.

Certain types of trusts can provide significant financial benefits. For example, an individual can create a trust for the purpose of benefiting people with disabilities by allowing them to be eligible for government benefit programs while also receiving the benefit of supplemental funds from the trust. These are Special Needs Trusts, and can pay for goods and services not covered by government programs. An individual or guardian for a disabled person can create a special needs trust with monies recovered in lawsuits, life insurance proceeds, inheritance, or gifts. 

There are various kinds of Special Needs Trusts that are available depending upon the individual circumstances and facts of each situation. Of course, there are many rules that apply to each of these types of trusts. These trusts must be prepared by experienced and knowledgeable attorneys based on individual facts and circumstances. Individuals who want to create a trust must exercise caution. The penalty for failing  to properly create the trust in accordance with the rules can lead to loss of government benefits. And that failure can cause considerable financial damage. Indeed, the failure by attorneys to properly advise a family regarding the coordination of special needs trusts to protect monies recovered in lawsuits, and to protect government benefits, has led to legal malpractice damage recoveries against lawyers. 

Each family must make its own estate planning decisions with the advice of experienced counsel and after full consideration of all the risks, options, and alternatives. Over the years, our clients, many of whom have made multimillion-dollar personal injury recoveries, have worked with experienced trust and estate lawyers to make these decisions. Families in this situation need to make nuanced financial decisions, and preservation of government benefits may not always be the best option given the unique circumstances of the family and the person with disabilities. That is one of the many reasons why expert advice is necessary.