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Affordable Care Act Upheld: Implications for Special Needs Children

6-25-2015 - On June 25 the Supreme Court rejected the last judicial challenge to the Affordable Care Act. This is good news for families of special needs children, because among the law's features is a provision prohibiting insurance companies from denying coverage based on pre-existing conditions.

With "Obamacare" now the law of the land, parents with sufficient assets to provide private health insurance for their child may find that a Special Needs Trust is no longer the most suitable planning strategy. Although a Special Needs Trust can preserve a disabled child's access to Medicare health benefits, among other federal benefits, it also severely restricts how trust assets may be used. Even giving the beneficiary pocket money may imperil the individual's access to governmental benefits.

Therefore, If you can afford to furnish your child with private health insurance and don't need to preserve his/her access to Medicare, it may make sense at this juncture to do away with the Special Needs Trust. Alternatively, you may want to consider leaving assets for your child in a discretionary trust, which gives you greater latitude over how the beneficiary may use the money. Or, if your child is capable of managing his/her own financial affairs, you may even wish to leave funds to him/her directly.

A warning, though: There is still talk about Congress taking future action to eviscerate the Affordable Care Act. If we have a president in 2016 who agrees with that agenda, special needs children could still be in peril. Please contact The Karp Law Firm to discuss your options.

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