Planning for Special Needs Individuals
All parents of minor children, not just those with disabled children, should consider who will care for their children physically in the event both parents die before the child turns 18 years old. In most states, guardians are appointed and monitored by a court of law. Parents can express their wishes to the court by naming an individual or individuals to serve as guardian until the child reaches 18. Although courts are not bound by the parents selection, courts do give considerable weight to the parents’ wishes.
Guardianship may also need to be considered when a disabled child reaches the age of 18 and is incapable of making informed decisions without appropriate guidance and information. Guardianship is often necessary when medical decisions must be made. Parents of adult disabled children not only lose the right to speak for their children, but also lose the right to receive any information concerning their child’s medical condition and care. Guardianship also protects the adult child from making inappropriate financial decisions. Thus, a guardianship may not only be beneficial, but also a necessity.
Protection of Public Benefits
Whether you, the parent, need to be concerned about public assistance benefits today or in the future depends on the nature of your child’s disability, future medical needs, prognosis for long term survival and independence, age, employment potential and insurability, just to name a few. For example, if your child will need long term custodial care, faces future extensive medical needs or will be unable to engage in meaningful and substantial employment, it is likely your child will require some public assistance.
Federal and State benefits such as Medicaid and Supplemental Security Income (SSI) can cover much of your disabled child’s necessary expenses. However, in order to qualify for these benefits, your child cannot have more than $2000 in assets. Money which your disabled child inherits or receives from parents or grandparents, other relatives, and friends could, therefore, deprive your child of much needed public benefits. Therefore, careful estate planning is essential to protect your child’s eligibility for these benefits.
Supplemental Needs Trusts
A Supplemental Needs Trust provides funds to your disabled child to enhance his or her qualify of life without jeopardizing public benefits. With a Supplemental Needs Trust, your child can maintain a quality of life similar to that enjoyed under your care. The Trust can pay for movie tickets, haircuts, vacations, special education, etc.
Money and property transferred to the Trust are not considered assets of the disabled child as long as there is an independent trustee who controls the use and distribution of the money. The Trust also ensures that a qualified individual will be watching over the money, a particular concern for parents whose disabled child may be unable to properly manage money on their own.
The Supplemental Needs Trust can be funded in many ways. Friends and relatives can place money into the Trust at anytime, either during their lives or upon death through direct bequests. Additionally, the Trust can be funded with annuities or life insurance proceeds.
Planning for the inevitable allows you to take control of your child’s emotional and financial security. It will give you the peace of mind to know that your child will be cared for physically and financially. For more information, call our office or contact us.