Special Needs Planning Report SPRING 2016

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Spring 2016
Elder Law
Estate & Disability Planning
www.grayelderlaw.com
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The Special Needs Planning Report
To Clients, Colleagues and Friends:
We are proud to be a supporter of the Myron Cope – Foge Fazio Memorial Golf
Invitational for Autism taking place on June 13, 2016.
For more information contact the Autism Society of Pittsburgh
412-856-7223
Understand the options when settling a case by visiting:
Bullying:
How to Protect Students with Disabilites at School
Written By Julian Gray, Certified Elder Law Attorney and Western Pennsylvania Representative for the Special Needs Alliance
“I remember coming home from school and crying every
night. I endured daily laughing by other children because I
talked differently, took a long time to find the right words and
used the wrong words.”
"The more I was bullied, the more my self-esteem evaporated
until I couldn't even think for myself and make choices," said
Kecia Weller.
Bullying is prevalent in today's society and takes many forms,
ranging from direct physical abuse to verbal insults and
intimidation to online "cyberbullying." To complicate
things, studies have shown that children with disabilities are
two to three times more likely to be bullied than their peers
without disabilities. Fortunately, there are laws to
protect individuals with disabilities.
The Individuals with Disabilities Education Act (IDEA) ensures
that eligible children have a right to a free, appropriate public
education (FAPE), and schools are legally required to enforce
policies to prevent bullying that interferes with that right.
There are many steps that families can take to stop bullying,
and the Individualized Education Program (lEP) can play an
instrumental role in both identifying issues and implementing
solutions. Parents can take action by:
• Reassuring the child and encouraging him or her to
describe what took place and who was involved.
• Learning about the child's friendships.
• Immediately asking the child's teacher and other school
personnel to help remedy the situation.
• Contacting the principal, in writing, if the issue is not
resolved.
• Requesting an IEP team meeting to address concerns.
• Determining whether the bully is also victimizing other
students.
• Consistently checking with the child and school staff
to ensure that the bullying has ceased.
• lnforming the school of any subsequent incidents.
Potential IEP team strategies might include:
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Establishing a school "point person" to whom the
child can report bullying episodes.
Verifying that the school consistently reassures the
child that he or she is entitled to feel safe and bears
no responsibility for the incidents.
As appropriate, having school staff shadow the child
to ensure that episodes are not repeated.
Peer advocacy. Peer intervention is a powerful force
- research has shown that more than 50% of bullying
situations stop when a peer steps in.
PACER Center is a parent training and information
center for families of children and youth with all
disabilities from birth to young adults. PACER's National
Bullying Prevention Center provides sample letters for
contacting school administrators and establishing a
written record: pacer.org/publications/bullypdf/BP19.pdf.
The important thing to remember is that a bullied
student is not alone and help is available. We as a
community, but also in our individual capacities as
family members, professionals, educators and even
bystanders, must take an active role to prevent bullying.
Concerned family members can contact a special needs
attorney for more information on the rules governing
these situations and the remedies available to them.
Learn more about this issue from The Arc's National
Center on Criminal justice and Disability, or NCCJD, at
nccjd.thearc.org.
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spring 2016
www.grayelderlaw.com
Income Taxes and Special Needs
This installment of the Voice was written by Robert B. Fleming. Robert is a partner in Fleming & Curti, PLC, a Tucson law firm focusing on special
needs planning, trust administration, guardianship/conservatorship and estate planning. He is a Fellow of the American College of Trust and Estate
Counsel, and also of the National Academy of Elder Law Attorneys. He has been a member of the Special Needs Alliance since its founding, and was
one of the original co-authors of the SNA’s Handbook for Trustees, the free online guide to managing special needs trusts.
As April 15 looms, people with special needs – and
their families, caretakers and trustees – think about
the same thing that preoccupies every other
American: income taxes. But are there special rules,
benefits or practices that are particularly focused on
people with special needs? Of course there are.
We wrote about tax tips for parents with a child with
special needs back in April of 2014, and the
information we shared then is still mostly applicable
– though with updated figures for this year’s tax
filings. In March of 2014, we wrote about tax returns
filed by the trustee of a special needs trust, and that
information is also still accurate (but with updated
figures). You should read those articles! (found at
specialneedsalliance.org) Today, we will update the
information in our earlier articles, and add the few
new things that have developed since those articles.
Updated figures
First, a look at current (for 2015 tax returns) figures.
Two years ago we reported that you may be able to
claim your “child” as a dependent, depending on the
child’s age, living situation, income, and disability,
and that doing so would give you an additional
personal exemption. For returns filed this year, the
value of that personal exemption has increased to
$4,000 of reduction in your taxable income; the
figure is scheduled to go up in 2016 by another $50.
Note that “child” actually includes brothers, sisters,
nieces or nephews. For details, you can look at IRS
Publication 501.
Our earlier articles also pointed out that, beginning
in 2014, it was important to make sure that your
child with a disability was covered by appropriate
medical insurance. If you list the child as a
dependent on your income tax return, lack of
insurance coverage for the child could result in a tax
penalty to you. The size of that penalty will vary
depending on your family size and income, but it
could be from a few hundred dollars to a couple
thousand dollars – and the severity of the penalty is
slated to increase again for 2016. For 2015, the
maximum penalty for an individual is 2 percent of
income (or $325, if greater).
Claiming the tax credit for the elderly and
disabled
Are you or your spouse over age 65? If so, you
might be able to claim an additional tax credit
because of your age. That same credit is available
to people under 65, if they are receiving taxable
disability income and they are permanently and
totally disabled. And there is an even bigger credit
if the disabled person is under 18. But it’s
complicated, and it is also limited based on your
income. You can check out IRS Publication 524 for
the details.
Deductible disability-related expenses
When you are preparing your income tax return,
you have the option of itemizing your deductible
expenses. Of course, in order to get any benefit
from itemization, your medical expense deductions
will now need to exceed 10% of your adjusted
gross income (unless you are over 65, then it is
7.5%) – but a number of possible medical expense
deductions are particularly relevant for people with
disabilities:
Home modifications. Did you incur costs to
modify your home for accessibility? Those
expenses might be deductible as medical
expenses. This is not available for purely aesthetic
improvements, and the deduction can only be
claimed to the extent that the work does not
increase the value of the home. Still, this can
provide a significant tax savings in some cases.
Conference and seminar expenses. If you attend
conferences and seminars – even out-of-town –
the costs may be deductible as a medical expense
if they were essential to your dependent’s medical
care. Get a letter from your child’s physician
recommending that you attend, and focusing on
the medical care needs. You still won’t be able to
deduct meals and lodging, though you may be able
to deduct travel expenses.
Special school expenses. Generally, educational
costs do not qualify for the medical care deduction
– but in some circumstances school expenses do
The information you obtain in this newsletter is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We
invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any
confidential information to us until such time as an attorney-client relationship has been established.
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qualify. The primary distinction: if the primary reason
for attending the school is to alleviate the child’s
disability through the school’s resources and
training. If the standard is met, even that portion of
the tuition that covers room and board may be
deductible. Talk with your tax preparer about this
type of deduction.
Child and dependent care expenses. If you pay
someone else – generally, not a family member – to
care for a dependent child or spouse so that you can
work, you might be eligible for a credit for some of
those expenses. The rules are a little bit
complicated, but the IRS spells them out in its
Publication 503, which walks through the process
step-by-step. In short, the credit can be claimed if
the person needing care qualifies as a dependent, if
you arrange the care so that you can work and earn
income, and the payments are not to certain family
members.
Special needs trusts
If a trust is in place for your family member with a
disability, then the tax picture can be somewhat
more complicated. The trust might need to file a
separate income tax return, but in some
circumstances the trust’s income is reported on the
beneficiary’s personal income tax return. Talk with
your professional tax preparer about which approach
is appropriate in your circumstance.
Regardless of which kind of trust is involved, the
person with disabilities might have “income” for tax
reporting purposes – without ever having received
any direct distributions from the trust. If tax is due,
the trust may be able to pay the tax. The fact that
income is reported to the beneficiary, though, might
well change whether you are able to list an
otherwise dependent child on your income tax
return, since you must have provided more than half
of the child’s support.
Occasionally a choice can arise: should the person
with whom the trust beneficiary lives claim the trust
beneficiary as a dependent, or does it make more
sense for the beneficiary to use his or her own
personal exemption to reduce the taxes the
beneficiary pays? In some high-income trust
situations, it can actually save money for the
individual to take the exemption and not be named
as a dependent, even though that might increase the
income taxes for the parent or other caretaker.
If the special needs trust does file a separate tax
return, make sure that the tax preparer knows about
the “Qualified Disability Trust” option. It might save
significant tax liability if the trust can elect to be
treated as a disability trust. The eligibility
requirements are fairly easy to meet, and the
effect is to reduce the trust’s taxable income by
about $4,000. Trusts usually have only a $100
exemption, but this Qualified Disability Trust
status gives the trust the equivalent of an
individual’s $4,000 personal exemption.
ABLE Act accounts
Since our last tax writing in 2014, the federal
government has created a new category of taxfavored accounts specifically for people with
disabilities. The Achieving a Better Life
Experience (ABLE) Act of 2015 authorizes states
to create special savings accounts for people with
disabilities – akin to, but different from, 529
college savings plans available for parents and
grandparents to save money for education costs.
Account earnings will be tax exempt, and
distributions will also be tax exempt if made for
“qualified disability expenses.” However, the
accounts are limited in amount, and must repay
the State for medical assistance paid on the
beneficiary’s behalf once the beneficiary dies.
None of this impacts any 2015 income tax return,
since no accounts have been established yet.
Congress recently amended the ABLE Act so that
an account can be set up in any state without
regard to the disabled individual’s state of
residency. That means that accounts will be
available to everyone as soon as any one state
has a program actually in place and open for
business.
Although one stated reason for the development
of ABLE Act accounts was to make them more
tax-efficient, the reality is that few tax issues will
be addressed by the new law. Contributions by
one person into an account for a family member or
other beneficiary are not deductible from the
income of the donor, and do not create income to
the beneficiary. The largest tax effect of ABLE Act
accounts will be with respect to the earnings on
such accounts once opened. Stay tuned for
upcoming articles on the development of ABLE
Act accounts and strategies for their use.
"Reprinted with permission of the Special Needs Alliance” –
www.specialneedsalliance.org." About The Voice Newsletter, the e-mail newsletter of The
Special Needs Alliance: We hope you find this newsletter useful and informative, but it is
not the same as legal counsel. A free news- letter is ultimately worth everything it costs
you; you rely on it at your own risk. Good legal advice includes a review of all of the facts
of your situation, including many that may at first blush seem to you not to matter. The plan
it generates is sensitive to your goals and wishes while taking into account a whole
panoply of laws, rules and practices, many not published. That is what The Special Needs
Alliance is all about. Contact information for a member in your state may be obtained by
calling toll-free (877) 572-8472, or by visiting the Special Needs Alliance online.
spring 2016
www.grayelderlaw.com
April is Parkinson’s Disease Awareness Month
Did you know that ten percent of newly diagnosed Parkinson’s Disease (PD) cases involve people younger
than 50? The concerns and needs of this younger population often differ from those of older PD patients as
they are tackling the challenges of career, parenting, and pursuing goals for the future. The disease also
progresses differently in younger populations with different treatments and outcomes.
For over twenty years, the Parkinson Foundation Western Pennsylvania has worked to be the leading
community resource for early onset and later onset PD in Western Pennsylvania and to serve as an informed
voice to give guidance, direction and concrete, practical tips on disease management; and to provide
complimentary services, information, education and support including exercise and lifestyle programs, support
groups, education for the newly diagnosed, and information on the latest treatments and management tools.
PD is also a cause that is near and dear to the heart of our Jennifer Rose, Certified Elder Law Attorney,
who sits on the Board of Directors for the Foundation and serves as the Co-Chair of the Development and
Events Committees.
April is Parkinson’s disease awareness month and we at Julian Gray Associates want to spread the word
about the cutting edge programming currently being offered through the Parkinson Foundation Western PA.
We encourage those who are impacted by PD to contact the Foundation for additional information and details
on program offerings and events, to join the Foundation mailing/emailing list, to volunteer in honor of a loved
one, or even to join Jennifer’s team for the annual “Step Forward” walk on September 24, 2016. Please call
the Foundation at 412-837-2542, visit the website at www.pfwpa.org or email for more information at
[email protected] or [email protected].
Julian Gray, CELA is the Western Pennsylvania representative of the Special Needs
Alliance, a national, not for profit organization of attorneys dedicated to the practice of
disability and public benefits law. Membership is extended to attorneys by invitation-only.
Julian Gray Associates
954 Greentree Road
Pittsburgh, PA 15220
412-458-6000
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