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Planning Steps for Children with Special Needs

Caring for a child with special needs and/or raising a child with disabilities is fraught with financial responsibilities that may be difficult to manage. These life situations require careful estate planning when the parent or caregiver is no longer around to make the necessary financial and other decisions for that child.

Believe it or not, some estimates suggest that lifetime care for a child with autism may add up to an estimated $3.2 million over that child’s lifetime in some of the more severe cases. This represents a significant challenge for the nearly 20 million U.S. families facing this struggle.

For this reason, it is natural for families who have a child with special needs to want to set aside assets in their children’s names or name them as beneficiaries in wills or life insurance policies. But some of this basic planning comes with pitfalls-most notably risking the child’s access to support services. Families must be mindful with their financial planning in order to avoid disqualifying their child from crucial benefits. In many cases a special needs trust should be used to provide for their child’s care instead of having their assets flow directly to the special needs child. On top of that, many parents need to consider how they should plan for their own retirement, since they may never have an “empty nest”.

Special Needs Trusts
A recent Daily Finance article offered a few helpful tips for all families in this situation. A few suggestions touched upon include:

•Create a Supplement Special Needs Trust (SSNT): This is the kind of a trust that allows you to leave funds for the care of your child without disqualifying them from federal aid.

•Consider creating a “letter of intent:” Although this is not a binding legal document, it gives the courts and trustees a better understanding of what you intend for your child in case something happens to you. You should include such details as medical history, preferred care and living arrangements, and whom you’d like to have guardianship over your child after you’re gone.

•Make Sure Your Will Funds the SSNT, not the Child: You must have a valid will in the case of a special needs child. Make sure that you and your spouse have a valid will written that makes the supplemental special needs trust the beneficiary of the special needs child’s portion of the estate.

•File for Legal Conservatorship: Don’t make the mistake of assuming that you are always going to be the legal guardian of your child. Once he or she reaches 18 years of age you may run into issues unless you file for such with the court.

•Learn all about the help that special needs children may receive from Medicaid, Medicare, the State Children’s Health Insurance Program, or the Children with Special Health Care Needs portion of the Social Security Act.

To have help with these issue in San Diego and nearby California communities feel free to contact the estate planning lawyer at the Law Office of Scott Soady.

See Our Related Blog Post:

Challenging Will or Trusts
Advance Care Directives and Religious Beliefs

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