The U.S. Supreme Court has affirmed a federal appellate decision allowing the father of a learning-disabled child to seek private school tuition reimbursement from New York City without first giving the city’s public school program a chance to meet the boy’s needs.

Families with special needs children often face difficult decisions about education. In many cases, public schools are either not equipped or trained to provide a satisfactory educational experience for special needs children. Where can you go to get the best for your child?

The Individuals with Disabilities Education Act (IDEA) was originally enacted in Congress in 1975. Significant amendments were added to the law in 1997, including tuition reimbursement provisions for special needs families that can not find a suitable educational experience in their public school system. Over the years there have been numerous cases across the country that have attempted to clarify the parameters of when a family is entitled to reimbursement under the 1997 amendments. As you can imagine, different courts came to different conclusions and interpretations.

Just last week the U.S. Supreme Court jumped into the fray showing an interest in establishing some uniform guidelines. The specific case was an appeal from the federal 2nd Circuit, which includes Connecticut, so the decision is binding for Connecticut cases.

The case (Board of Education v. Tom Freston, 06-637) centers on a 1997 amendment to the Individuals with Disabilities Education Act (IDEA), which requires states provide “free appropriate” public education for students with disabilities. The specific issue is whether that law requires children to first receive “special education and related services” from a public agency before their families pursue reimbursement.

An independent hearing officer ruled in favor of the Frestons, but Southern District of New York Judge George Daniels sided with the city. In a summary order in August 2006, the 2nd Circuit reversed Daniels’ decision, saying it would lead to absurd results.

In the 2nd Circuit opinion, Judge Edward R. Korman, the chief judge of the Eastern District of New York, said the city’s view of the statute would “place the parents of children with disabilities in the untenable position of acquiescing to an inappropriate placement in order to preserve their right to seek reimbursement from the public agency that devised the inappropriate placement.”

Nine days after hearing oral arguments in Board of Education v. Tom F., 06-637, the Court split 4-4, thereby affirming the 2nd U.S. Circuit Court of Appeals’ finding in favor of Mr. Freston — the boy’s father.

In its two-sentence opinion, the Court did not reveal the judges’ individual votes, stating only, “The judgment is affirmed by an equally divided Court. Justice Kennedy took no part in the decision of this case.”

It is a split decision and not a loud endorsement, but if you are a family with a special needs child in Connecticut your case for tuition reimbursement just got stronger.

This issue may be considered again by the U.S. Supreme Court as the split decision did nothing to resolve a split in authority with the 1st Circuit, where an appellate panel ruled that students must first avail themselves of the public school system before their parents seek reimbursement.

Until 1993, as a parent with a disabled child or the spouse of someone in a nursing home, you faced a difficult decision: if you left a legacy for your disabled child or spouse, you might make them ineligible for government assistance.

When the federal government enacted the Omnibus Reconciliation Act of 1993, however, it made it possible for you to 1) provide funds to support your special-needs child and 2) retain your child’s eligibility for federal, state and private charitable benefit programs such as SSI and Title 19 Medicaid.

The Omnibus Reconciliation Act of 1993 excluded from benefit program eligibility requirements the legacy left to special-needs children in a properly created Special Needs Trust. A Special Needs Trust may provide no advantage if it is not properly established.

How to Secure the Future with a Special Needs Trust

The Special Needs Trust is simple to establish, and it not only provides immeasurable peace of mind, it also gives you complete control over your child’s care.

You work with your estate planning attorney to appoint Trustees for your child’s Special Needs Trust. The Trustees oversee your child’s well-being and manage the estate you or anyone else leave for his or her benefit. So there is no need for a probate court to determine your child’s fate.

Unlike the guardian or conservator a probate court might appoint, these Trustees are people you know and trust. Relatives or close family friends can be appointed to supervise your child’s personal care.

To work with financial institutions and manage the estate, you may want to appoint a professional financial advisor, as a Co-Trustee.

As part of setting up your child’s Special Needs Trust, you provide detailed written instructions in the trust to direct the Trustee’s activities. By law, Trustees must follow these instructions to the letter. So you have a tremendous degree of control over your child’s education, housing, and other needs.

Best of all, the Special Needs Trust preserves your child’s eligibility for federal, state and charitable benefit programs such as SSI and Title 19 Medicaid. The only requirement is that the funds withdrawn from the Special Needs Trust must be for purposes other than those covered under the governmental and private benefit programs. The concept is fairly simple, but the execution is technical and complex. Special Needs Trusts are carefully scrutinized by government benefits agencies and one error in the language of the trust can undo everything it is designed to accomplish.

In many cases where a child is permanently injured in an accident or medical mistake the settlement funds are placed into a Special Needs Trust for the benefit of the child. This technique allows parents to provide a better quality of life for their child while maintaining eligibility for benefits programs to provide the minimum medical coverage. Insurance companies that paid for treating a child’s injuries seek to recover their expenses against the settlement as you may expect.

Recently, U.S. District Judge John P. Fullam made an interesting decision in Mills v. London Grove Township. Judge Fullam strictly interpreted the insurance company’s claim for reimbursement to only exist against the ERISA beneficiary which in this case was the child’s father. The litigation on behalf of the child, Grace, was settled by placing the funds directly into a Special Needs Trust to provide ongoing care. Judge Fullam relied partially on this fact to deny the insurance company’s claim for reimbursement against the funds allocated to Grace’s Special Needs Trust.

This is an important decision for parents with children that have been injured and that use a Special Needs Trust to provide for their child. If the decision stands on appeal, parents can hope to preserve more of their child’s funds for their own care without reduction by insurance reimbursement claims.

You can read the full opinion here.

The U.S. Autism & Asperger Association put together a nice list of the 9 Costly Mistakes to Avoid in Planning for Your Special Needs Child. I recommend it for everyone that has a family member with special needs.