Special Needs Planning at Morgan Legal Group

A complete special needs plan typically has six components. First, a Special Needs Trust — third-party, first-party, or pooled depending on the funding source — drafted under EPTL § 7-1.12 and 42 USC § 1396p(d)(4). Second, the family's underlying estate plan (the parents' wills, revocable trust, powers of attorney, and healthcare directives) reworked to direct the disabled child's inheritance through the SNT rather than outright. Third, properly aligned beneficiary designations on life insurance, retirement accounts, and other non-probate assets.

Fourth, an adult guardianship structure activated when the disabled child reaches 18 — either an SCPA Article 17-A guardianship for individuals with developmental disabilities arising before age 22, or a Mental Hygiene Law Article 81 guardianship for impairments that arose later or that affect only specific decision-making capacities. Fifth, Medicaid eligibility planning if the beneficiary will rely on Medicaid for healthcare, long-term care, or waiver services. Sixth, ABLE account integration under 26 USC § 529A for small-scale beneficiary-controlled funds.

Each component interacts with the others. A poorly drafted SNT undermines the parents' will. A neglected guardianship leaves the disabled adult without legal decision-making authority at 18 and one day. An inheritance from a grandparent that bypasses the SNT disqualifies the beneficiary from Medicaid. The components only work as a coordinated system, which is why we draft them together rather than piecemeal.

The SNT is the centerpiece. Third-party SNTs — funded by parents, grandparents, or other relatives — carry no Medicaid payback obligation and pass remainder assets to whomever the family designates on the beneficiary's death. We typically draft third-party SNTs inside the parents' estate plan, with funding triggered at the second parent's death through life insurance, retirement-account beneficiary designations, or testamentary devises.

First-party SNTs under 42 USC § 1396p(d)(4)(A) hold the beneficiary's own money — most often a personal-injury settlement — and must be established before the beneficiary turns 65. The Medicaid payback obligation attaches to remainder funds at death. Pooled trusts under (d)(4)(C) have no age cap and are the standard solution for sheltering surplus monthly income to qualify for Community Medicaid.

Drafting precision separates SNTs that work from SNTs that fail. The distribution standard must be fully discretionary, the beneficiary cannot have a right to compel distributions, no Crummey withdrawal powers, no mandatory income payments, no support-and-maintenance language. We draft to the EPTL § 7-1.12 statutory requirements and the federal POMS standard at SI 01120.200 simultaneously, because both apply and they do not perfectly align.

On the disabled child's 18th birthday, parental legal authority ends. The young adult becomes legally responsible for medical decisions, financial transactions, contracts, and benefits applications — regardless of whether the disability permits any of those activities. Families who do not file a guardianship petition before or shortly after the 18th birthday discover that the doctor will not discuss the child's care with the parents, the bank will not let the parents access the child's accounts, and the school cannot share educational records.

SCPA Article 17-A is the statute for individuals whose developmental disability — intellectual disability, autism, cerebral palsy, neurological impairment, traumatic brain injury — arose before age 22. The petition is filed in the Surrogate's Court of the county of residence, supported by physician and psychologist certifications, and typically results in appointment of one or both parents as guardian of the person and property. The process is relatively streamlined for clear cases.

Mental Hygiene Law Article 81 is the more flexible alternative, available for any adult whose functional limitations make decision-making impossible. Article 81 requires a Supreme Court hearing, a court-appointed evaluator, and a tailored order specifying exactly which powers the guardian receives. We use Article 81 for impairments that arose after 22, for partial impairments, and for situations where the guardian's authority needs to be limited or temporary.

Most adult New Yorkers with significant disabilities rely on Medicaid for healthcare and on Medicaid waivers for community-based services. The Office for People With Developmental Disabilities (OPWDD) administers Home and Community-Based Services (HCBS) waivers for individuals with developmental disabilities, providing day programs, residential placements, supported employment, and individual supports. Eligibility for OPWDD services is established through the OPWDD Front Door process and requires both diagnostic and functional documentation.

Non-OPWDD waivers serve other populations: the Traumatic Brain Injury (TBI) waiver, the Nursing Home Transition and Diversion (NHTD) waiver, and the Children's HCBS waiver each carry distinct eligibility requirements and service packages. We help families navigate the application process for the right waiver, coordinate with care managers and service coordinators, and ensure the SNT and broader plan complement rather than collide with the waiver structure.

ABLE accounts under 26 USC § 529A provide a complementary savings vehicle for individuals whose disability arose before age 26 (rising to age 46 in 2026 under SECURE 2.0). ABLE accounts allow the disabled individual to save up to $18,000 per year (with additional contributions allowed for working ABLE participants), up to a New York lifetime cap of $520,000, with the first $100,000 disregarded for SSI purposes. ABLE funds can be used for housing — something an SNT cannot easily do without ISM consequences — making the account particularly useful for routine living expenses.

Our special needs planning practice is led by attorneys with substantial experience in trust drafting, Surrogate's Court guardianship practice, and Medicaid eligibility law. We meet with every family for an initial consultation at no charge to identify the right plan components, the funding sources, and the order of operations. The output is a written engagement proposal with a flat fee.

Drafting the SNT and the related instruments typically takes three to four weeks. We prepare the trust, the revisions to the parents' will and revocable trust, the beneficiary-designation update letters, the guardianship petition (when the child is approaching or past 18), and a trustee instructions manual. Everything is signed in one or two coordinated sessions at our office.

Ongoing support is available as families' needs change. New Medicaid rules, the beneficiary's evolving circumstances, the death of a named trustee, a transition from one waiver to another, a move out of state — each can require trust amendments, guardianship modifications, or strategy adjustments. We stay engaged with families as their plans mature.