Attorney & Mediator
Attorney & Mediator

Special Needs Planning

Parents with special needs children live with the daily challenge of caring for this special child – both emotional and financial.  Unfortunately, many parents believe that they must disinherit the child in order to preserve government benefits. 

This places the child at peril and/or places the other children in the family with a significant burden. With appropriate planning, the special needs child can be provided for without risking his or her governmental benefits.

The first question that a parent will ask is, “Who will care for my child when something happens to me?” Most parents assume a sibling will provide the emotional and financial support for their special needs child. A family member can, in all likelihood, provide the love and emotional support for the special needs child.  It can be a heavy financial burden to expect that family member to provide financial support as well.

Creating a Special Needs Trust (SNT) is a solution.  This can provide the special needs child with the amount of care and support that the parents find appropriate after the parents are gone. This Trust can provide financial resources for the child that will not affect his or her eligibility for the all‑important government benefits such as Social Security Supplemental Income (SSI), Medicaid, and housing subsidy benefits.

The Special Needs Trust provides support for the child as long as this support does duplicate that provided by government benefits. So assets from a Special Needs Trust may be used to purchase items that will enhance the child’s quality of life, such as entertainment, family vacations, etc.

A Special Needs Trust must be carefully crafted to achieve these goals and to conform to federal guidelines and state requirements.  A properly and carefully crafted Special Needs Trust, however, will allow your child to receive the benefits of inheritances from you and other loved ones all without jeopardizing the child’s government benefits.

Planning for the Young Family

 

Most young families don’t do estate planning.  They believe that since they are young and healthy they don’t need to.  Or, they think they can’t affording it. 

Unfortunately, illness and death can strike the young as well as the old.  While it is less common for a young person to have such a tragedy, it can happen.  How would this affect your family?  Your spouse?  Your young children?

Estate planning does not have to be expensive.  The young family can start with basic estate planning documents: Wills, Durable Power of Attorneys and Patient Advocate Designations.  It is a good time to look at affordable term insurance.  As your family situation and wealth change, you can update and/or upgrade your estate plan to meet your needs.

What you will need to consider:

 

  • Who will be your Personal Representative (Executor)?  This individual will be responsible for handling all of your final financial affairs.  He or she should be trustworthy, capable and willing to take on this responsibility.  Also, if you are naming your spouse, you need a back-up person.  We travel together and the same accident could affect both of you. 
  • Who will be the Guardian for your Children?  This is the most difficult question that parents confront and what often prevents them from finishing an estate plan.  If you don’t appoint someone, the Court would be forced to do it in your absence, without your input and without knowing much about your life or your children. 
  • How should your assets be distributed and/or used?   If your spouse survives, this is not an issue; however, if both parents die, the children need to be provided for. 
  • Who would be the Conservator for the Children?  While the Guardian is the individual who raise the children, someone needs to manage the assets for them.  This might not be the same individual.  It must be someone who is financially savvy and willing to do this for a number of years. 
  • Do you need insurance?  Do you have life insurance through your employer(s)?  Would it be enough?  If one parent is a “stay-at-home” parent, insurance is definitely needed.  While there is no salary to replace, there will be significant costs to take over his or her responsibilities.

 

If you are a young family, with children, it is important to plan for the “what if”.  A basic estate plan can set your mind at ease by setting up the financial framework and individuals to care for your family if you are not there.