“I think that most folks understand that doing the initial investment upfront, setting their affairs up correctly, legally is a lot more cost effective.”

 

 

Episode 2: Understanding Special Needs Legal Planning with Jason Shellack

In Episode 2, host Allycia Wolff talks with attorney Jason Shellack. As Executive Director of the Autism Advocacy & Law Center, Jason shares his expertise on special needs estate planning. In this episode, Allycia and Jason dive into the various trusts and wills that financially and legally prepare you for the future.

You can find more information about Focus on the Future at arcminnesota.org/podcast. If Episode 2 inspired a question for an Arc Advocate, call The Arc Minnesota at 833.450.1494.

 

About the Autism Advocacy & Law Center

Since 2009, the Autism Advocacy & Law Center has provided high-quality, cost-effective legal services to people with disabilities and their families. Serving the state of Minnesota, their attorneys help with guardianship, special needs estate planning, trusts, family law, special education, criminal defense, medical assistance, and social security. Learn more at autismlawcenter.com.

 

About Focus on the Future

Focus on the Future is a podcast for caregivers and families supporting people with disabilities. In each episode, a conversation about the journey of discovering our best life and how to achieve it. While exploring legal, financial, and quality of life structures, Focus on the Future aims to get back to what matters most: living a fulfilling and meaningful life that is defined by each individual person.

Episode 2 Transcript

00:00 [music playing]

00:05 [Allycia Wolff] Welcome to Focus on the future, a future planning podcasts for caregivers and families supporting people with disabilities. Focus on the Future is a podcast of The Arc Minnesota, a nonprofit advocacy organization working with folks with intellectual and developmental disabilities. My name is Allycia Wolff. I’m an advocate with The Arc Minnesota and your hosts for Focused on the Future. In this week’s episode I will be chatting with Jason Shellack, he’s an attorney with the Autism Advocacy & Law Center and we will be having an in depth conversation about estate planning and trust and all the legal aspects that you should consider when you’re thinking about your future. Thanks for joining us.

00:43 [music playing]

00:51 [Allycia Wolff] In the last episode I spoke a little bit about the three legged stool, so how the core components of future planning are broken into three aspects; legal, financial, and quality of life planning. In the next few episodes I’m going to be focusing on one of those areas and today’s episode is going to be about legal planning, which we often call estate planning and when it comes to families that are caring for a loved one with a disability, it’s referred to as special needs estate planning. It’s this really niche area of law that some attorneys know really, really well and can help families with and this is why The Arc has an attorney list of people that specialize in special needs estate planning because it is such a niche area of the law. Overall estate planning is something that everybody and anybody should do.

01:46 [Allycia Wolff] It’s generally referred to as the legal coordination of your will and your trust; often times healthcare directives and powers of attorney. All of the like paperwork stuff so that once somebody passes away, all of their estate is organized in a way where families won’t have to fight in court or go through a whole legal arduous process, estate planning helps protect all of that. Specifically when it comes to supporting people with disabilities that are on government benefits, special needs estate planning focuses on making sure that people can continue to receive critical benefits even after their parents pass away. And this is often where trusts come into play, so families will think to themselves, I have a child with a disability, I would really like to give them some assets upon my passing to ensure that all of their needs are met across their lifetime.

02:46 [Allycia Wolff] But the concern comes in when people are receiving benefits like social security or medical assistance, where there are asset limits. The asset limits on these programs are often like two or $3,000, so people have more money than that then they’re disqualified from these benefits that they really need. Trust enable families to leave money behind for a loved one and know that the money in that trust is going to be spent on anything that is needed in the future, without disqualifying them from benefits and there’s a few different kinds of trusts that people can consider, which I’ll explain now. It’s important to know that this information also is specific to Minnesota. If you are looking up information about trusts in California or Maine or Florida or Ohio, you’ll hear similar language, but there will be different specifics in it. Know that this information is specific to Minnesota and also know that I’m not an attorney so I can’t tell people exactly what they should do as far as the legal plan, but I can help people understand just generally what the options are.

03:59 [Allycia Wolff] So in Minnesota we basically have two different kinds of trusts, a third party supplemental needs trust, and a first party special needs trust. Now the third party supplemental needs trust is what a lot of people put together when they are thinking about the future and they are proactively planning. A supplemental needs trust is often what families create when they are doing their will and they’re thinking overall about estate planning. So a third party supplemental needs trust is that proactive planning tool, it allows people to keep their benefits and receive as much money from anyone. Third party means that it’s anybody aside from the person with the disability putting money into that trust. We call this the proactive planning tool is supplemental needs trust. Alternatively, there is the first party special needs trust. Now, here at The Arc we affectionately refer to the special needs trust as the “oopsy” trust.

05:01 [Allycia Wolff] And so this is when maybe proactive planning didn’t happen or couldn’t happen, or it was just an accident and somebody gave money outright to a person with a disability and said, oops, this can’t happen, this person needs to still be qualified for these benefits, so now let’s put it in a trust. This could also happen with a social security payback or with like a settlement from an accident. A first party special needs trust as an “oopsy” trust. Oops, this person has money in their name, they shouldn’t, we’re going to put it in a trust. And so the special needs trusts the money that is the person’s. The special needs trust also comes back, comes with a payback clause, so upon the person’s passing, any money left in that trust has to go to pay the state back for any services that they have paid for and accrued over their lifetime.

05:54 [Allycia Wolff] Whereas the supplemental needs trust doesn’t have a payback clause and you can elect beneficiaries for any money that is still in the trust upon the person’s passing. So basically in Minnesota, those are the two trust options; a third party supplemental needs trust, the proactive planning tool and the first party special needs trust, the “oopsy” trust, the trust, that’s money that has been in the person’s name at some point. Now with those two trusts, there’s also two ways to set up those trusts. So you can set up those two trusts with a private attorney and then choose a trustee of your own choice to manage that, so often it’s families that manage that or have a cousin or an aunt or something. You can set it up privately with an attorney and choose your own trustee or you can set up a pooled trust. And a pooled trust is managed by a nonprofit organization such as The Arc Minnesota. In Minnesota there are a few different options for organizations that have and manage pool trusts. We are just one of them, but it can be a great option for a lot of families. Many people choose the pooled trust option when they don’t have anybody that can step into the role of a trustee or they just want it to be managed by the organization.

07:19 [Allycia Wolff] And that is an incredibly brief summary of trust and special needs estate planning in Minnesota, there’s a lot more pieces that could go to that, so in future episodes of the podcast we’re going to talk about healthcare directives and powers of attorney and successor care for things like guardianship and trustees. That’s often something that comes in, but this episode specifically is going to be on all the legal specific pieces. The rest will come later. So when you choose an attorney and you are starting with this process of doing your special needs, estate plan, you’ll go in and you’ll say, I want to establish a supplemental needs trust and I need to do my will. Your will is another really critical component to the special needs estate plan because it is the document that describes what you want to happen with your estate and what your intentions are.

08:20 [Allycia Wolff] And a will is an important legal document for anybody, but especially in this process because your will has to state that the supplemental needs trust exists and that you want your estate to be allocated to the supplemental needs trust and not to your child with a disability. Your will has to say that explicitly and it has to have some language in there that is specific to statute so that everything works well. And that’s why it’s so important to work with an attorney that is well knowledged in this area, and that’s why we have our pool of estate planning attorneys. Please feel free to call for that list at any time, ask any additional questions that you may have because we’re always here to help. So enough of me, again talking about all of the intricacies of estate planning, let’s hear from Jason Shellack. I’ve known Jason for much of my career at The Arc and he has been an incredible advocate and legal support for many of the families that work with The Arc. He’s on our attorney list and just a really great resource as well as all of the other attorneys that we work with. I’ll let Jason introduce himself and now we’ll jump into the interview.

09:43 [Allycia Wolff] Thanks for being here today, really appreciate you coming in. Maybe we can start by how you define special needs estate planning and what your work means to you.

09:53 [Jason Shellack] Sure, so special needs estate planning means to me means a family is looking to make future plans that help fund their disabled child’s future. And when we talk about, when I talk about special needs estate planning with clients some of the, some of the pieces that we do with that other law firms may not do, would be the supplemental needs trust and the special needs trust. And those are sort of those, the supplemental needs trust is what I refer to as the back bone of a special needs estate plan and then we sort of build from there.

10:29 [Allycia Wolff] Okay, great. How did you get started in this work?

10:32 [Jason Shellack] So I have been working with families who have kiddos with disabilities since high school. I started working for Camp Courage North and I worked for Camp Courage North for about six summers. I PCA’d for one family, the same family for about seven years throughout undergrad and then part of law school after I graduated from law school, I did a stint in the public defender’s office up in Grand Rapids, Minnesota for about a year and a half and then when I saw that the Autism Advocacy and Law Center was hiring, I submitted my resume right away. I got an interview within about a week and then within about 10 days, had an offer to start working at the law center. And I’ve been there since and that was in 2013.

11:16 [Allycia Wolff] And you’ve since purchased the law firm?

11:19 [Jason Shellack] Correct, so the firm’s founder is a individual by the name of Amy Dawson, who is now Judge Dawson in Hennepin County. Amy was elected to the bench in 2014 and then, in 2015 when she was seated on the bench and sworn in, I accentually inherited a law practice. So there are three attorneys right now and one very, very capable legal assistant. We do all of our work is focused on working with the special needs community; parents and individuals themselves and family members and caregivers. We do a lot of estate planning, special needs estate planning, we do medical assistance applications for clients, we do social security applications for clients, guardianship cases, healthcare directives, powers of attorney. Then increasingly, I myself am doing a lot of family law.

12:17 [Allycia Wolff] When a family has come to you and they have like their first meeting with you about future planning, what are some questions that they typically ask? Why do they come to you or your law firm?

12:29 [Jason Shellack] Families are typically coming to us, either they’ve heard me speak at a conference, they have heard about us through Facebook parent group they’re involved with, they’ve heard about us from The Arc, they’ve heard about us from PACER. They are looking I think for some guidance as to, I know in general what estate planning means, it means having something like a will and maybe a trust, but how do we set this up and make sure that it’s correct? I think a lot of people have fears around, you know, in the old days going through the yellow pages, the white pages and these days just Googling special needs estate planning and making sure they find a good fit for themselves and for their family and making sure they find an attorney or firm that actually does this work correctly.

13:13 [Jason Shellack] So I think a lot of people are coming to us looking for some expertise in this area. I have four attorneys who handle these matters and these wills and trusts and especially in trusts, special needs trusts, and on a regular basis so that they have the sort of the, the confidence and comfort that we are with the product they’re getting that the estate plan and the legal documents that are being drafted for them and executed do in fact, meet their goals.

13:41 [Allycia Wolff] And do what they’re intended to do.

13:42 [Jason Shellack] Correct. Correct. In order to correctly draft a special needs trust or a supplemental needs trust, you have to understand social security and medical assistance. If you don’t understand those two programs, you’re not going to be able to draft the trust properly and you’re not going to be able to advise your clients properly on how to spend trust assets.

14:02 [Jason Shellack] There are big law firms out there that do estate planning really, really well for people who have a lot of money. For a lot of those families they haven’t considered or have decided to at that in time, not yet apply for any government benefits. And a lot of times that attorneys who are really good at helping large net worth families manage their wealth, don’t understand social security, medical assistants, SSI rather medical assistants. Because those are generally thought of as programs to help poor people and in those attorneys general practices when they’re meeting with, you know, millionaires, they don’t need to know about MA because they essentially self fund their futures and their, and their kiddos futures, which is fine. But if government benefits are available to help with your child’s future, why not take advantage of them?

14:59 [Allycia Wolff] And with that being said, so a lot of the people that you support are middle income. A lot of families think that my $3,000 to create an estate plan is really, really expensive and really costly. Would you, what do you say in response to the cost of establishing a full estate plan?

15:21 [Jason Shellack] So my response would be, you are incurring some costs up front, but it would, it is much less expensive to do proper estate planning on the front end than to die without a will, without any estate planning documents, without a supplemental needs trust. Because if you die, what we call intestate. So dying intestate means without a will. And then we look to Minnesota law to decide how that person’s estate gets divided up amongst their heirs and relatives. And if one of those individuals happens to be an individual with a disability who is receiving government benefits, social security and medical assistance, oftentimes we would have to open a probate. We would have to draft a special needs trust. I think we would have to make a motion or file a motion or a petition for a protective order in order to transfer the individual’s assets out of their name, out of their personal, um, out of their personal estate into a special needs trust.

16:22 [Jason Shellack] That whole process will cost you well over $3,000. So at our firm in general for the estate planning that we do for a married couple, for two wills to health care directives to powers of attorney and a supplemental needs trust, which is what I would call kind of our standard special needs estate planning package. Our flat fee is generally right at about $2,400. So to do all of this work up front and give clients the peace of mind knowing that when the second parent passes away, or even when the first parent passes away, that legally they are set up so that their child is protected and that their government benefits won’t be interfered with. I think that most folks understand that doing the initial investment upfront, setting their affairs up correctly, legally is a lot more cost effective.

17:16 [Allycia Wolff] And then how often would you say, once you’ve established the trust and the will and a healthcare directive, how often would you say people should reapproach that?

17:28 [Jason Shellack] So I recommend that folks, you know, some people, a lot of attorneys will say every year, I think it’s good. I think it’s good at least every year to review what is in your estate plan. Namely who are the people who I have appointed or nominated to play these really key roles for me. Who do I want it to be my personal representative? Who do I want to be my healthcare agent? Who do I want to be my attorney in fact, and who do I want it to be the trustee of my supplemental needs trust for my child with a disability. The people that we nominate now in 2019 may not be around in 2030. People move, people go people, people get jobs.

18:13 [Allycia Wolff] Relationships change.

18:14 [Jason Shellack] Correct. So all of a sudden there are all sorts of reasons that a client may want to change who their nominated personal representative, healthcare agent, attorney in fact, and trustee are.

18:30 [Allycia Wolff] That brings up the point of successor trustees and who people name. And that’s a lot of the work that we do here at The Arc in our FutureLife Options program is helping people think about who is in their life and who can step in and act in those roles when they’re no longer here. And that’s a lifetime conversation, right? And it’s a much bigger conversation than I’m sure you have with a lot of people that you support. And as that question comes up, do you have any tips that you share with families?

19:01 [Jason Shellack] Yeah, the general advice I give to folks is to the extent that we can nominate somebody who knows the individual with the disability well and knows their needs, that’s oftentimes a really good option. So when we first establish a supplemental needs trust, oftentimes it’s the parents or the parent who are the initial trustees. Um, but then I think the more pressing issue that you raised is after the parents or parents are no longer able to serve as trustee, who do we nominate to be successor trustee. I think frequently a natural selection may be another sibling. Um, if there are no other siblings in the family, perhaps not or an uncle, other family members, nieces and nephews, cousins. I, you know, philosophically like the thought of having, you know, of supporting the individual with their current support network.

19:59 [Jason Shellack] That being said, sometimes there are, there are folks out there who don’t have an extensive support network. And then we do have to look to independent or professional trustees to take over. And we also draft all of our supplemental and special needs trust to allow the trustee to merge that particular trust with a pooled trust. So the way I’ve always drafted our trust is if and when the trustee wants to step down or step aside and there isn’t another family member willing to serve, and if it may be too cost prohibitive to appoint a professional trustee that the trustee, the current trustee, can merge that trust with one of the pooled trusts around like, like Arc’s pooled trust. Yup.

20:52 [Allycia Wolff] Did not know that. That’s great. Cool. So, yeah, I mean that brings up one of the questions that I was gonna ask about. You set up private trusts where families can elect their own trustee. Another option is to set up a pooled trust where a charitable organization acts as the trustee. Do you have any advice to the general public or anything that you’d like to say?

21:21 [Jason Shellack] Yeah, so I’m aware in Minnesota that there are two organizations that operate pooled trusts. Am I right? You folks and Lutheran Social Service. I think you might, you know, my opinion of Arc and of LSS is how I have a lot of respect for the two organizations. I think they do a great job at administering their pooled trust. I think the value… There are many different perks I think to using a pooled trust. One of them is you get to maximize the trust corpus, so the assets in the trust, particularly for a trust that doesn’t have a whole lot of money in it. So, correct me if I’m wrong, but I what I see or what I’ve seen in my experience is for a trust that doesn’t have a lot of, you know, say it doesn’t have more than $50,000, $100,000 in it, to merge that into a pooled trust, you get to invest that with other people’s, other folks trust money and have a more diverse investment scheme to get a greater return on the trust income. So one major advantage to me is getting more investment income on that trust and that you would get as part of a pooled trust, part of a larger trust corpus than just that small trust corpus by itself. I think another major advantage is it allows family members to be family members. And not have to be the person or the bad guy, the bad person who says, no, you can’t have that Nintendo game cartridge. No, I’m not going to let you-

23:03 [Allycia Wolff] Buy a car in Tennessee that you haven’t seen.

23:05 [Jason Shellack] Yes. Purchase things on eBay. I think it’s a nice way for family members to say, we just want to be family members. And if there are any disputes regarding financial issues, especially when an individual after an individual turns 18, to be able to, it’s nice for parents and siblings to be able to say sometimes go ask your trustee, your trustee’s in charge of your money.

23:34 [Allycia Wolff] Go ask your dad. Go as your mom. [laughs]

23:34 [Jason Shellack] Yes. They say no, then they say no. But it does take the pressure off the family members.
Allycia Wolff: 23:43 I think I just have one more question for you. You said that when you do the special needs to stay planning with families that comes with the will, the trust, the healthcare directive, the power of attorney. Now when we talk with families about doing a healthcare directive, we say that you don’t need an attorney to help you do just that piece of it. Same with the power of attorney depending on what you want it to cover. Would you agree with that, with being able to do, if you wanted to do just a healthcare directive on your own, would you say that it’s safe for people to fill that out and go to Honoring Choices and do that?

24:16 [Jason Shellack] Yeah, I think if you live in the state of Minnesota and you want to do your healthcare directive on your own and power of attorney on your own, I would direct people to the Minnesota Attorney General’s website. Because the Minnesota Attorney General’s office is kind of a consumer, it’s pro-consumer.

24:37 [Allycia Wolff] Great plain language information. Very straight forward.

24:40 [Jason Shellack] Correct. And the forms, I’ve reviewed their forms and their forms in my legal opinion are valid and comply with Minnesota law. So if someone is looking to do that on their own, I’m very comfortable referring folks to the Minnesota Attorney General’s office. To use their, you know, their guidelines and their forms for doing their healthcare directives and powers of attorneys. I’m not as familiar with Honoring Choices. I know it’s popular with a lot of people. I just don’t have the background of knowing who creates their templates. Are these created by attorneys? Are these templates created by Legal Zoom? I just don’t know. I would never do Legal Zoom. I would never do susieorman.com. I have had people walk in with stuff that they’ve gotten through Legal Zoom and it’s clearly defective. So if you’re going to do any of your own estate planning and you’re living in Minnesota, I would definitely use the Attorney General’s forms and guidance on that.

25:45 [Allycia Wolff] Great. Wonderful. Is there anything that we’ve missed in this conversation?

25:50 [Jason Shellack] I don’t think so. Folks are always welcome to follow up us individually. So if you go to the website, autismlawcenter.com, you can submit an inquiry through the website and it will get routed to whichever attorney happens to be working on that particular question and we will get back to people.

26:10 [Allycia Wolff] Thanks for coming in today.

26:12 [Jason Shellack] You’re very welcome.

26:12 [Allycia Wolff] Much appreciated.

26:15 [Allycia Wolff] So there’s that. Just a little bit of information about legal planning, what it is, where to start, and how to do it. Remember that you can start this process at any time. It’s never too late and it’s always worth it. And this is just one of the pieces to consider. So stay tuned for what we have out next.

26:42 [Allycia Wolff] If this episode inspired questions for an advocate at The Arc, please give us a call at (833) 450-1494.

26:52 [music playing]

26:54 [Allycia Wolff] On the next episode of Focus on the future, we will be talking about quality of life. One of the critical aspects to the three legged stool. And in this episode we’ll be talking to people about what makes a good life, how they have ensured that their child will live a good life now and the future, and what you can do along the way to make that process easy for yourself and for your loved ones. I hope you’ll join us.

27:19 [music playing]

27:21 [Allycia Wolff] Focus on the Future is a podcast of The Arc Minnesota. Subscribe to the podcast on your favorite streaming service to stay up to date with the newest episodes. If you’re enjoying listening, please support the podcast and our mission by donating at arcminnesota.org/podcast. Our podcast music is composed and recorded by Micah Kadwell. Micah is a talented guitarist from New Brighton, Minnesota ,who also has autism. Thank you, Micah!