Estate Planning Tips When a Child has Special Needs
If your child has special needs, you have undoubtedly spent a lot of time caring for him/her day to day and preparing for his/her the future. You Estate Plan can continue to provide a watchful eye over your loved one if you make smart decisions now.
One of the best decisions you can make is to create a special – or what we like to call a supplemental -- needs trust for your child.
A properly structured trust manages your child’s inheritance so public benefits that cover food, shelter and medical care are not lost.
It may seem like a good idea to leave the inheritance to the child’s sibling who promises to take care of the sibling with a disability, but this arrangement is short sighted and foolish.
The child with the money may run into financial trouble and become unable to care for his brother or sister. He may also become incapacitated or die, leaving his sibling high and dry. In addition, if the child with the money gets divorced or runs into credit problems, the funds may be targeted by his creditors or spouse.
When you create a supplemental needs trust for your child, you guarantee she/he gets a fair share of the inheritance and reduce reliance on sibling(s).
If you already plan to create this type of trust, do it today! If you die and your child receives assets outright, his public benefits may be reduced or lost. In some cases, the state might ask to be reimbursed for services provided.
A trust that is properly written and sufficiently funded can offer your child security in the future including education and special equipment to help with the disability. It can also help pay for unexpected medical expenses and be available to improve your child’s quality of life into the future as you do today.
- Choose a trustee who understands your family values and will have your child’s best interests at heart. The trustee should be able to manage money and be well-organized. Sometimes a professional is a better choice than a sibling or family members.
Invite others to contribute to the trust. If you set it up early, grandparents and concerned aunts and uncles may want to contribute from time to time or in their estate plans.
When you are looking for an attorney to help you draft a supplemental needs trust, ask about experience and knowledge in this area. At Estate & Elder Law Services, we have attorney who are certified by the National Elder Law Foundation, the only organization accredited by the American Bar Association to certify attorneys who specialize in supplemental needs planning.