Planning Your Estate When You Have a Special Needs Child

Estate planning is important regardless of who you are.

However, it is even more important when you have a special needs child.

If your child is a minor or an adult, it is important that you consider your child’s needs when putting together your estate plan.

Why Is Special Needs Estate Planning Important?

Parents of children with special needs are normally the individuals providing the majority of, if not all of, the caretaking on a daily basis for their children, even as they go into adulthood.

However, what happens to that child when his or her parents pass away? Suddenly, that child is without financial support, medication assistance and even a physical place to live.

Further, once that child’s parent passes away, suddenly the child will begin receiving income from public benefit agencies, including social security and Medicaid. What happens to that income?

Odds are the child is not capable of handling this money on his or her own.

It is important that something is laid out to ensure that the money is protected, it is used for the child’s living expenses, and the money is spread out and continued throughout the life of the child.

Another issue that often arises when parents leave an inheritance to their special needs child is that the money left to them could disqualify that child from the government benefits they were receiving.

The last thing a parent wants to do is get their child kick out of their living arrangements because they no longer qualify for special government programs or benefits.

What is Included in Special Needs Planning

Two different aspects of the disabled child’s life are dealt with in special needs planning.

Special needs planning includes provisions on designating a guardian or conservator for the child, if needed, as a minor and on into adulthood, if necessary.

These provisions also protect the financial well-being of the child, ensuring that he or she continues to enjoy the quality of his or her life, making sure that the child remains eligible for public benefits, managing the money and ensuring that the child will have money for future use through investments and access protection.

Special Needs Planning Provisions

Many options exist for planning your estate around your special needs child.

Ideally, the best situation would be to create what is known as a Special Needs Trust.

This document will allow your child to continue to receive public benefits given that the funds “inherited” by the child will not be going to the child but rather a Special Needs Trust.

This trust puts the financial-making authority in the hands of a trustee, who will ensure that decisions regarding any money are made in the best interests of the disabled child.

It goes without saying that the most important decision to be made is then who should the trustee should be.

Who Should Be the Trustee?

The Trustee is an important position.

This person will be making all of the decisions that secure the financial success of the funds in the special needs trust.

This person may face pressure from other family members, will have to make tough decisions, and should be someone you can trust with the life of your special needs child.

It is for this reason you should be careful in choosing a trustee for your special needs trust. You can choose someone in the family, such as a parent or sibling, so long as you believe that person can truly handle the responsibility.

If you do not feel comfortable in choosing someone related, you can pick a trust company, financial institution, or an attorney to handle these matters.

You can also choose co-trustees if you wish to have more than one individual making these decisions. Ultimately, it depends on your specific family situation.

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