USA Law and Practice Contributed by: Diana Zeydel, Marc Selden, Benjamin Babcock and Brian Smith, Greenberg Traurig, LLP
8. Planning for Minors, Adults with Disabilities and Elders 8.1 Special Planning Mechanisms US law provides a variety of planning mechanisms for minors and individuals with disabilities, including trusts and custodial arrangements that may protect assets, facilitate long-term care planning, and pre - serve eligibility for means-based public assistance programmes like Supplemental Security Income (SSI) and Medicaid. Special Needs Trusts (SNTs) SNT, known in many jurisdictions as a supplemental needs trust, is a commonly used planning vehicle that allows assets to be held for the benefit of an individual with a disability without jeopardising the beneficiary’s eligibility for means-tested government programmes, like Medicaid and Supplemental Security Income (SSI). To preserve eligibility for these benefits, the SNT must be structured so that trust distributions supple - ment, rather than supplant, government-provided assistance and are typically limited to goods and services that enhance the beneficiary’s quality of life and are not treated as countable income or resources under applicable programme rules. Uniform Transfers to Minors Act (UTMA) For minors, UTMA permits assets to be transferred to a custodian who manages the property for the ben - efit of the minor until the age specified under appli - cable state law. In most jurisdictions, custodianship terminates when the beneficiary reaches age 18 or 21. While UTMA accounts are relatively simple and inexpensive to establish and administer, they provide unfettered access to the funds at a young age. For substantial gifts or more sophisticated planning objec - tives, irrevocable trusts which extend beyond the age of majority are often preferred. Under recent federal legislation, the annual federal limit on tax-free withdrawals from Section 529 plans for qualified K–12 education expenses increased from USD10,000 to USD20,000 per student, and the defini - tion of qualified K–12 expenses has been significantly expanded.
Families planning for individuals with disabilities should consider ABLE (Achieving a Better Life Expe - rience) accounts, which continue to offer tax-advan - taged savings without adversely affecting eligibility for some public benefits. Beginning in 2026, the annual contribution limit is generally USD20,000, subject to certain additional contributions available under the ABLE-to-Work rules for eligible employed beneficiar - ies. The age-of-onset requirement for ABLE eligibility has expanded, allowing individuals whose disability began before age 46 to qualify for an account. 8.2 Appointment of a Guardian The appointment of a guardian, conservator or similar fiduciary in the US is governed by state law and gen - erally requires a court order. To address jurisdictional issues that arise when an individual has connections to multiple states, some states have adopted the Uni - form Adult Guardianship and Protective Proceedings Jurisdiction Act (UAGPPJA) or substantially similar legislation. Guardianship A guardianship proceeding is typically initiated for a minor or an adult who is determined to be unable to manage personal affairs or make informed decisions regarding their health, safety or welfare. The process generally involves the filing of a petition, medical evaluations, notice to interested parties and a judicial determination regarding capacity. Once appointed, a guardian is responsible for making decisions with - in the scope of authority granted by the court and remains subject to ongoing court supervision. Conservatorship A conservatorship is generally used when an individual is unable to manage property, financial affairs or other assets. The conservator is appointed by the court and would be responsible for protecting and managing the individual’s property. Durable Powers of Attorney, Health Care Proxies and Living Wills To reduce the likelihood of court intervention, indi - viduals frequently execute durable powers of attorney, health care proxies and living wills. These documents permit individuals to appoint trusted agents to man - age financial and medical matters in the event of inca -
689 CHAMBERS.COM
Powered by FlippingBook