Estate Planning for Special Needs
Any number of scenarios can require parents to plan care for a child beyond their own lifetimes. This might be an older child with Downs Syndrome, Autism or Cerebral Palsy. It might include a child who has suffered some type of debilitating injury or mental illness. These circumstances can raise concerning questions about what kind of life your child will have, where they will live and what will be their needs going forward. Whatever the case, special needs planning will be essential for that individual to maintain access to public benefits that are contingent on financial need.
What is a Special Needs Trust?
One of the useful legal tools that estate planning can offer is a Special Needs Trust. Also known as a Supplemental Needs Trust, this provision can be added to a Will, providing financial support for individuals with disabilities without disrupting their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). Any amount of money can be placed in this type of trust, whereas leaving money for your child directly in your Will, will in most cases, eliminate their eligibility for support services. These trusts are designed to supplement, not replace, government benefits and can be an important resource for families with a disabled loved one. The trust can be used to pay for items and services that are not covered by government benefits, such as medical equipment, home modifications, therapy, and other expenses that may improve the quality of life for the disabled individual.
How is a Special Needs Trust managed?
Families need to carefully consider the terms of the trust and how it will be managed. For example, the trust should specify who will manage the trust and make decisions about how the funds will be used. The trust should also include provisions for what will happen to the trust assets if the disabled individual passes away or is no longer incapacitated. It provides for distribution to a “beneficiary” all or part of an estate by a “trustee” who has been appointed by the person establishing the trust.
There are also important considerations about caretaking and guardianship responsibilities. This should be someone who is responsible and who cares about your child. You can consider siblings, family members, or even appoint a professional fiduciary who can over see the distribution of funds. This may involve a legal Power of Attorney that sets up a person to oversee financial and/or medical decisions with your child’s permission. Ultimately, you need to ensure this is someone who will outlive you and a system that can be sustained after you are gone.
Who is involved in the planning?
If they are able, it is good to involve your child in the planning process and in making provisions that support their wishes. With their help, you might create a Letter of Intent that outlines key care providers, medical support and people who might play key roles going forward, and plan to update this letter every couple of years.
If you are considering setting up a special needs trust, it is important to work with an experienced attorney to ensure that the trust is properly established and meets all legal requirements. The team at Hillsborough Wills & Trusts understands the personal and unique nature of these family circumstances and welcomes the opportunity to help you Build Your Circle of Security around your loved ones.
Call us for a free consultation at 919-245-8440 or contact us today at: https://hillsboroughwills.com/contact.