Special Needs Planning

Parents worry about their children constantly. But, that worry is magnified when a daughter or son has special needs. In honor of Autism Awareness Month, we wanted to focus on Special Needs Planning  as a part of your Estate Planning and why it’s so important.

Special Needs Planning

Whether your child with special needs is a minor or an adult, it’s important to use caution when making estate plans. You will want your estate plan to provide for the child’s care, while also not jeopardizing any need-based programs they may be on such as Medicaid or SSI.

Special needs estate planning must strike that careful balance of ensuring that the child is taken care of for life, but that any part of the parents’ assets that pass to their child with special needs is not considered an available asset. Keep in mind that too much income, cash or property might result in benefit ineligibility.

Special needs planning can also set up lifetime money management for the child with special needs and ensure there’s money to care for them if public funding is reduced or eliminated.

Special Needs Trust

A Special Needs Trust can help strike that delicate balance of providing care without endangering public assistance eligibility. Under this type of trust, the assets are controlled by a trustee the parents choose and are not available to the child. These trusts have strict limits on the trustee’s ability to give money to the child. The trustee, in effect, acts as the child’s money manager and will help ensure financial management after the parents die.

The trust can be incorporated into a parent’s Last Will and Testament or can be created while the parents are alive as a living trust.

Trusting the Trustee

As you can imagine, one of the most important tasks in Special Needs Planning is selecting the trustee. The Special Needs Alliance has some important factors to consider when choosing a trustee. The Alliance says you should think about the relationship between the possible trustee and child, the costs associated with a potential trustee, their knowledge of money management and taxes, and the potential liabilities.

Most families find it reduces tension and issues when a non-family member is selected as the trustee. Another option is to appoint co-trustees – a family member and an experienced professional trustee.

The Need

One in every 54 children has been diagnosed with autism spectrum disorder according to the Autism Society of Indiana. That’s a staggering number. Although the severity of the disorder can vary widely from child to child, many will need some level of care throughout their lives. Special Needs Planning can help ensure that care is available even after their parents are gone.

Contact Applegate & Dillman today to learn more about Special Needs Planning and how it might fit into your estate plan.